Correlation Between Kingsmen CMTI and Internet Thailand

Can any of the company-specific risk be diversified away by investing in both Kingsmen CMTI and Internet Thailand 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 Kingsmen CMTI and Internet Thailand into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Kingsmen CMTI and Internet Thailand

-0.64

Correlation Coefficient

Kingsmen CMTI  Internet Thailand

Excellent diversification

The 3 months correlation between Kingsmen and Internet is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kingsmen CMTI Public and Internet Thailand Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand Public and Kingsmen CMTI 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 Kingsmen CMTI Public are associated (or correlated) with Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand Public has no effect on the direction of Kingsmen CMTI i.e., Kingsmen CMTI and Internet Thailand go up and down completely randomly.

Pair Corralation between Kingsmen CMTI and Internet Thailand

Given the investment horizon of 90 days Kingsmen CMTI Public is expected to under-perform the Internet Thailand. But the stock apears to be less risky and, when comparing its historical volatility, Kingsmen CMTI Public is 1.8 times less risky than Internet Thailand. The stock trades about -0.04 of its potential returns per unit of risk. The Internet Thailand Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  462.00  in Internet Thailand Public on September 14, 2024 and sell it today you would earn a total of  143.00  from holding Internet Thailand Public or generate 30.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Kingsmen CMTI Public  vs.  Internet Thailand Public

Kingsmen CMTI Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Internet Thailand Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Thailand Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Internet Thailand disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingsmen CMTI and Internet Thailand

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

The idea behind Kingsmen CMTI Public and Internet Thailand 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.