Correlation Between KGI Securities and Bank of Ayudhya

Can any of the company-specific risk be diversified away by investing in both KGI Securities and Bank of Ayudhya 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 KGI Securities and Bank of Ayudhya into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for KGI Securities and Bank of Ayudhya

0.81

Correlation Coefficient

KGI Securities  Bank of Ayudhya

Very poor diversification

The 3 months correlation between KGI and Bank is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Bank of Ayudhya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Ayudhya and KGI Securities 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 KGI Securities Public are associated (or correlated) with Bank of Ayudhya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Ayudhya has no effect on the direction of KGI Securities i.e., KGI Securities and Bank of Ayudhya go up and down completely randomly.

Pair Corralation between KGI Securities and Bank of Ayudhya

Assuming the 90 days trading horizon KGI Securities Public is expected to under-perform the Bank of Ayudhya. But the stock apears to be less risky and, when comparing its historical volatility, KGI Securities Public is 1.44 times less risky than Bank of Ayudhya. The stock trades about -0.1 of its potential returns per unit of risk. The Bank of Ayudhya is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,490  in Bank of Ayudhya on September 17, 2024 and sell it today you would earn a total of  35.00  from holding Bank of Ayudhya or generate 1.41% return on investment over 90 days.

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

KGI Securities Public  vs.  Bank of Ayudhya

KGI Securities Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bank of Ayudhya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of Ayudhya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bank of Ayudhya 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 KGI Securities and Bank of Ayudhya

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

The idea behind KGI Securities Public and Bank of Ayudhya 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..