Correlation Between Thai Energy and Kiattana Transport

Can any of the company-specific risk be diversified away by investing in both Thai Energy and Kiattana Transport 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 Thai Energy and Kiattana Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thai Energy Storage and Kiattana Transport Public, you can compare the effects of market volatilities on Thai Energy and Kiattana Transport 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 Thai Energy with a short position of Kiattana Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Energy and Kiattana Transport.

Diversification Opportunities for Thai Energy and Kiattana Transport

-0.85

Correlation Coefficient

Thai Energy  Kiattana Transport

Pay attention - limited upside

The 3 months correlation between Thai and Kiattana is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Thai Energy Storage and Kiattana Transport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiattana Transport Public and Thai Energy 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 Thai Energy Storage are associated (or correlated) with Kiattana Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiattana Transport Public has no effect on the direction of Thai Energy i.e., Thai Energy and Kiattana Transport go up and down completely randomly.

Pair Corralation between Thai Energy and Kiattana Transport

Assuming the 90 days trading horizon Thai Energy Storage is expected to generate 0.14 times more return on investment than Kiattana Transport. However, Thai Energy Storage is 7.04 times less risky than Kiattana Transport. It trades about 0.09 of its potential returns per unit of risk. Kiattana Transport Public is currently generating about -0.09 per unit of risk. If you would invest  5,300  in Thai Energy Storage on September 13, 2024 and sell it today you would earn a total of  75.00  from holding Thai Energy Storage or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Thai Energy Storage  vs.  Kiattana Transport Public

Thai Energy Storage

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Energy Storage are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Thai Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Kiattana Transport Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kiattana Transport Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Thai Energy and Kiattana Transport

The main advantage of trading using opposite Thai Energy and Kiattana Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Energy position performs unexpectedly, Kiattana Transport 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 Kiattana Transport will offset losses from the drop in Kiattana Transport's long position.

The idea behind Thai Energy Storage and Kiattana Transport Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.