Correlation Between Kiatnakin Phatra and Muang Thai
Can any of the company-specific risk be diversified away by investing in both Kiatnakin Phatra 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 Kiatnakin Phatra and Muang Thai 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 Muang Thai Insurance, you can compare the effects of market volatilities on Kiatnakin Phatra 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 Kiatnakin Phatra with a short position of Muang Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiatnakin Phatra and Muang Thai.
Diversification Opportunities for Kiatnakin Phatra and Muang Thai
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kiatnakin and Muang is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank 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 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 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 Kiatnakin Phatra i.e., Kiatnakin Phatra and Muang Thai go up and down completely randomly.
Pair Corralation between Kiatnakin Phatra and Muang Thai
Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to generate 1.62 times more return on investment than Muang Thai. However, Kiatnakin Phatra is 1.62 times more volatile than Muang Thai Insurance. It trades about 0.0 of its potential returns per unit of risk. Muang Thai Insurance is currently generating about -0.03 per unit of risk. If you would invest 5,175 in Kiatnakin Phatra Bank on September 13, 2024 and sell it today you would lose (25.00) from holding Kiatnakin Phatra Bank or give up 0.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kiatnakin Phatra Bank vs. Muang Thai Insurance
Performance |
Timeline |
Kiatnakin Phatra Bank |
Muang Thai Insurance |
Kiatnakin Phatra and Muang Thai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kiatnakin Phatra and Muang Thai
The main advantage of trading using opposite Kiatnakin Phatra and Muang Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiatnakin Phatra 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.Kiatnakin Phatra vs. KGI Securities Public | Kiatnakin Phatra vs. Lalin Property Public | Kiatnakin Phatra vs. Hwa Fong Rubber | Kiatnakin Phatra vs. MCS Steel Public |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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