Correlation Between JRW Utility and Kiattana Transport

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

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

Diversification Opportunities for JRW Utility and Kiattana Transport

0.86

Correlation Coefficient

JRW Utility  Kiattana Transport

Very poor diversification

The 3 months correlation between JRW and Kiattana is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding JRW Utility Public 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 JRW Utility 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 JRW Utility Public 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 JRW Utility i.e., JRW Utility and Kiattana Transport go up and down completely randomly.

Pair Corralation between JRW Utility and Kiattana Transport

Assuming the 90 days horizon JRW Utility Public is expected to under-perform the Kiattana Transport. But the stock apears to be less risky and, when comparing its historical volatility, JRW Utility Public is 1.27 times less risky than Kiattana Transport. The stock trades about -0.32 of its potential returns per unit of risk. The Kiattana Transport Public is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Kiattana Transport Public on September 15, 2024 and sell it today you would lose (4.00) from holding Kiattana Transport Public or give up 10.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

JRW Utility Public  vs.  Kiattana Transport Public

JRW Utility Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JRW Utility Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional 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 JRW Utility and Kiattana Transport

The main advantage of trading using opposite JRW Utility and Kiattana Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JRW Utility 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 JRW Utility Public 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .