Correlation Between Kingsmen CMTI and Panjawattana Plastic

Can any of the company-specific risk be diversified away by investing in both Kingsmen CMTI and Panjawattana Plastic 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 Panjawattana Plastic 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 Panjawattana Plastic Public, you can compare the effects of market volatilities on Kingsmen CMTI and Panjawattana Plastic 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 Panjawattana Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsmen CMTI and Panjawattana Plastic.

Diversification Opportunities for Kingsmen CMTI and Panjawattana Plastic

0.55

Correlation Coefficient

Kingsmen CMTI  Panjawattana Plastic

Very weak diversification

The 3 months correlation between Kingsmen and Panjawattana is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kingsmen CMTI Public and Panjawattana Plastic Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panjawattana Plastic 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 Panjawattana Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panjawattana Plastic has no effect on the direction of Kingsmen CMTI i.e., Kingsmen CMTI and Panjawattana Plastic go up and down completely randomly.

Pair Corralation between Kingsmen CMTI and Panjawattana Plastic

Given the investment horizon of 90 days Kingsmen CMTI Public is expected to generate 1.93 times more return on investment than Panjawattana Plastic. However, Kingsmen CMTI is 1.93 times more volatile than Panjawattana Plastic Public. It trades about -0.05 of its potential returns per unit of risk. Panjawattana Plastic Public is currently generating about -0.15 per unit of risk. If you would invest  131.00  in Kingsmen CMTI Public on September 12, 2024 and sell it today you would lose (14.00) from holding Kingsmen CMTI Public or give up 10.69% of portfolio value over 90 days.

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

Kingsmen CMTI Public  vs.  Panjawattana Plastic 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.

Panjawattana Plastic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panjawattana Plastic 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 basic indicators 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.

Pair Trading with Kingsmen CMTI and Panjawattana Plastic

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

The idea behind Kingsmen CMTI Public and Panjawattana Plastic 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.