Correlation Between Kasikornbank Public and Mountain Commerce

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

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

Diversification Opportunities for Kasikornbank Public and Mountain Commerce

-0.3

Correlation Coefficient

Kasikornbank Public  Mountain Commerce

Very good diversification

The 3 months correlation between Kasikornbank and Mountain is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public Co and Mountain Commerce Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mountain Commerce Bancorp 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 Co are associated (or correlated) with Mountain Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mountain Commerce Bancorp has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Mountain Commerce go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Mountain Commerce

Assuming the 90 days horizon Kasikornbank Public Co is expected to generate 4.08 times more return on investment than Mountain Commerce. However, Kasikornbank Public is 4.08 times more volatile than Mountain Commerce Bancorp. It trades about 0.07 of its potential returns per unit of risk. Mountain Commerce Bancorp is currently generating about 0.0 per unit of risk. If you would invest  1,603  in Kasikornbank Public Co on September 3, 2024 and sell it today you would earn a total of  195.00  from holding Kasikornbank Public Co or generate 12.16% return on investment over 90 days.

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

Kasikornbank Public Co  vs.  Mountain Commerce Bancorp

Kasikornbank Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kasikornbank Public showed solid returns over the last few months and may actually be approaching a breakup point.

Mountain Commerce Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mountain Commerce Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Mountain Commerce is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kasikornbank Public and Mountain Commerce

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

The idea behind Kasikornbank Public Co and Mountain Commerce Bancorp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .