Correlation Between BTS Group and Kiatnakin Phatra

Can any of the company-specific risk be diversified away by investing in both BTS Group and Kiatnakin Phatra 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 BTS Group and Kiatnakin Phatra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BTS Group Holdings and Kiatnakin Phatra Bank, you can compare the effects of market volatilities on BTS Group and Kiatnakin Phatra 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 BTS Group with a short position of Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTS Group and Kiatnakin Phatra.

Diversification Opportunities for BTS Group and Kiatnakin Phatra

0.06

Correlation Coefficient

BTS Group  Kiatnakin Phatra

Significant diversification

The 3 months correlation between BTS and Kiatnakin is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings and Kiatnakin Phatra Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiatnakin Phatra Bank and BTS Group 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 BTS Group Holdings are associated (or correlated) with Kiatnakin Phatra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiatnakin Phatra Bank has no effect on the direction of BTS Group i.e., BTS Group and Kiatnakin Phatra go up and down completely randomly.

Pair Corralation between BTS Group and Kiatnakin Phatra

Assuming the 90 days trading horizon BTS Group Holdings is expected to generate 1.11 times more return on investment than Kiatnakin Phatra. However, BTS Group is 1.11 times more volatile than Kiatnakin Phatra Bank. It trades about 0.21 of its potential returns per unit of risk. Kiatnakin Phatra Bank is currently generating about 0.02 per unit of risk. If you would invest  476.00  in BTS Group Holdings on September 15, 2024 and sell it today you would earn a total of  114.00  from holding BTS Group Holdings or generate 23.95% return on investment over 90 days.

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

BTS Group Holdings  vs.  Kiatnakin Phatra Bank

BTS Group Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BTS Group Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, BTS Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Kiatnakin Phatra Bank

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kiatnakin Phatra Bank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Kiatnakin Phatra is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BTS Group and Kiatnakin Phatra

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

The idea behind BTS Group Holdings and Kiatnakin Phatra Bank 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.