Correlation Between KPN Property and Thailand Prime

Can any of the company-specific risk be diversified away by investing in both KPN Property and Thailand Prime 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 KPN Property and Thailand Prime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KPN Property and Thailand Prime Property, you can compare the effects of market volatilities on KPN Property and Thailand Prime 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 KPN Property with a short position of Thailand Prime. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPN Property and Thailand Prime.

Diversification Opportunities for KPN Property and Thailand Prime

-0.35

Correlation Coefficient

KPN Property  Thailand Prime

Very good diversification

The 3 months correlation between KPN and Thailand is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding KPN Property and Thailand Prime Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thailand Prime Property and KPN Property 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 KPN Property are associated (or correlated) with Thailand Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thailand Prime Property has no effect on the direction of KPN Property i.e., KPN Property and Thailand Prime go up and down completely randomly.

Pair Corralation between KPN Property and Thailand Prime

Assuming the 90 days trading horizon KPN Property is expected to under-perform the Thailand Prime. In addition to that, KPN Property is 7.07 times more volatile than Thailand Prime Property. It trades about -0.12 of its total potential returns per unit of risk. Thailand Prime Property is currently generating about 0.04 per unit of volatility. If you would invest  726.00  in Thailand Prime Property on September 28, 2024 and sell it today you would earn a total of  24.00  from holding Thailand Prime Property or generate 3.31% return on investment over 90 days.

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

KPN Property  vs.  Thailand Prime Property

KPN Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KPN Property has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Thailand Prime Property

Risk-Adjusted Performance

2 of 100

Very Weak

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

Pair Trading with KPN Property and Thailand Prime

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

The idea behind KPN Property and Thailand Prime Property 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.