Correlation Between Haad Thip and Karmarts Public

Can any of the company-specific risk be diversified away by investing in both Haad Thip and Karmarts Public 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 Haad Thip and Karmarts Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Haad Thip and Karmarts Public

-0.02

Correlation Coefficient

Haad Thip  Karmarts Public

Good diversification

The 3 months correlation between Haad and Karmarts is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Haad Thip Public and Karmarts Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karmarts Public and Haad Thip 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 Haad Thip Public are associated (or correlated) with Karmarts Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karmarts Public has no effect on the direction of Haad Thip i.e., Haad Thip and Karmarts Public go up and down completely randomly.

Pair Corralation between Haad Thip and Karmarts Public

Assuming the 90 days trading horizon Haad Thip Public is expected to under-perform the Karmarts Public. But the stock apears to be less risky and, when comparing its historical volatility, Haad Thip Public is 1.52 times less risky than Karmarts Public. The stock trades about -0.05 of its potential returns per unit of risk. The Karmarts Public is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,051  in Karmarts Public on September 16, 2024 and sell it today you would earn a total of  89.00  from holding Karmarts Public or generate 8.47% return on investment over 90 days.

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

Haad Thip Public  vs.  Karmarts Public

Haad Thip Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Haad Thip Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Haad Thip is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Karmarts Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Karmarts Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Karmarts Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Haad Thip and Karmarts Public

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

The idea behind Haad Thip Public and Karmarts 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.