Correlation Between Kasikornbank Public and Communication System

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

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

Diversification Opportunities for Kasikornbank Public and Communication System

0.18

Correlation Coefficient

Kasikornbank Public  Communication System

Average diversification

The 3 months correlation between Kasikornbank and Communication is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Communication System Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication System and Kasikornbank Public 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 Kasikornbank Public are associated (or correlated) with Communication System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication System has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Communication System go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Communication System

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 6.13 times less return on investment than Communication System. But when comparing it to its historical volatility, Kasikornbank Public is 3.07 times less risky than Communication System. It trades about 0.01 of its potential returns per unit of risk. Communication System Solution is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Communication System Solution on September 15, 2024 and sell it today you would earn a total of  1.00  from holding Communication System Solution or generate 1.1% return on investment over 90 days.

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

Kasikornbank Public  vs.  Communication System Solution

Kasikornbank Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kasikornbank Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Kasikornbank Public is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Communication System

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Communication System Solution are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Communication System 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 Kasikornbank Public and Communication System

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

The idea behind Kasikornbank Public and Communication System Solution 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.