Correlation Between Kasikornbank Public and Muang Thai

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

By analyzing existing cross correlation between Kasikornbank Public and Muang Thai Insurance, you can compare the effects of market volatilities on Kasikornbank Public and Muang Thai 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 Muang Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasikornbank Public and Muang Thai.

Diversification Opportunities for Kasikornbank Public and Muang Thai

0.0

Correlation Coefficient

Kasikornbank Public  Muang Thai

Pay attention - limited upside

The 3 months correlation between Kasikornbank and Muang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Muang Thai Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muang Thai Insurance 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 Muang Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muang Thai Insurance has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Muang Thai go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Muang Thai

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 0.99 times more return on investment than Muang Thai. However, Kasikornbank Public is 1.01 times less risky than Muang Thai. It trades about 0.01 of its potential returns per unit of risk. Muang Thai Insurance is currently generating about -0.01 per unit of risk. If you would invest  15,750  in Kasikornbank Public on September 14, 2024 and sell it today you would earn a total of  50.00  from holding Kasikornbank Public or generate 0.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Kasikornbank Public  vs.  Muang Thai Insurance

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.

Muang Thai Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kasikornbank Public and Muang Thai

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

The idea behind Kasikornbank Public and Muang Thai Insurance 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.