Correlation Between Kiatnakin Phatra and LH Financial

Can any of the company-specific risk be diversified away by investing in both Kiatnakin Phatra and LH Financial 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 Kiatnakin Phatra and LH Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kiatnakin Phatra Bank and LH Financial Group, you can compare the effects of market volatilities on Kiatnakin Phatra and LH Financial 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 Kiatnakin Phatra with a short position of LH Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiatnakin Phatra and LH Financial.

Diversification Opportunities for Kiatnakin Phatra and LH Financial

0.14

Correlation Coefficient

Kiatnakin Phatra  LH Financial

Average diversification

The 3 months correlation between Kiatnakin and LHFG is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank and LH Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Financial Group and Kiatnakin Phatra 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 Kiatnakin Phatra Bank are associated (or correlated) with LH Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Financial Group has no effect on the direction of Kiatnakin Phatra i.e., Kiatnakin Phatra and LH Financial go up and down completely randomly.

Pair Corralation between Kiatnakin Phatra and LH Financial

Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to generate 1.12 times more return on investment than LH Financial. However, Kiatnakin Phatra is 1.12 times more volatile than LH Financial Group. It trades about 0.03 of its potential returns per unit of risk. LH Financial Group is currently generating about -0.07 per unit of risk. If you would invest  5,100  in Kiatnakin Phatra Bank on September 28, 2024 and sell it today you would earn a total of  125.00  from holding Kiatnakin Phatra Bank or generate 2.45% return on investment over 90 days.

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

Kiatnakin Phatra Bank  vs.  LH Financial Group

Kiatnakin Phatra Bank

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kiatnakin Phatra Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Kiatnakin Phatra is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

LH Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kiatnakin Phatra and LH Financial

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

The idea behind Kiatnakin Phatra Bank and LH Financial Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.