Correlation Between Visa and Krungthai Card
Can any of the company-specific risk be diversified away by investing in both Visa and Krungthai Card at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Krungthai Card into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Krungthai Card PCL, you can compare the effects of market volatilities on Visa and Krungthai Card and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of Krungthai Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Krungthai Card.
Diversification Opportunities for Visa and Krungthai Card
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and Krungthai is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Krungthai Card PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card PCL and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with Krungthai Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungthai Card PCL has no effect on the direction of Visa i.e., Visa and Krungthai Card go up and down completely randomly.
Pair Corralation between Visa and Krungthai Card
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.26 times more return on investment than Krungthai Card. However, Visa is 1.26 times more volatile than Krungthai Card PCL. It trades about 0.37 of its potential returns per unit of risk. Krungthai Card PCL is currently generating about -0.11 per unit of risk. If you would invest 28,365 in Visa Class A on August 27, 2024 and sell it today you would earn a total of 2,954 from holding Visa Class A or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Krungthai Card PCL
Performance |
| Timeline |
| Visa Class A |
| Krungthai Card PCL |
Visa and Krungthai Card Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Krungthai Card
The main advantage of trading using opposite Visa and Krungthai Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Krungthai Card can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Krungthai Card will offset losses from the drop in Krungthai Card's long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Krungthai Card vs. Thai Energy Storage | Krungthai Card vs. Royal Orchid Hotel | Krungthai Card vs. Grand Canal Land | Krungthai Card vs. PRG Public |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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