Correlation Between Krungthai Card and Berli Jucker

Can any of the company-specific risk be diversified away by investing in both Krungthai Card and Berli Jucker 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 Krungthai Card and Berli Jucker into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Krungthai Card PCL and Berli Jucker Public, you can compare the effects of market volatilities on Krungthai Card and Berli Jucker 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 Krungthai Card with a short position of Berli Jucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krungthai Card and Berli Jucker.

Diversification Opportunities for Krungthai Card and Berli Jucker

0.58

Correlation Coefficient

Krungthai Card  Berli Jucker

Very weak diversification

The 3 months correlation between Krungthai and Berli is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Card PCL and Berli Jucker Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berli Jucker Public and Krungthai Card 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 Krungthai Card PCL are associated (or correlated) with Berli Jucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berli Jucker Public has no effect on the direction of Krungthai Card i.e., Krungthai Card and Berli Jucker go up and down completely randomly.

Pair Corralation between Krungthai Card and Berli Jucker

Assuming the 90 days trading horizon Krungthai Card PCL is expected to generate 0.83 times more return on investment than Berli Jucker. However, Krungthai Card PCL is 1.21 times less risky than Berli Jucker. It trades about 0.08 of its potential returns per unit of risk. Berli Jucker Public is currently generating about 0.04 per unit of risk. If you would invest  4,525  in Krungthai Card PCL on September 12, 2024 and sell it today you would earn a total of  250.00  from holding Krungthai Card PCL or generate 5.52% return on investment over 90 days.

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

Krungthai Card PCL  vs.  Berli Jucker Public

Krungthai Card PCL

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Krungthai Card PCL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Krungthai Card is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Berli Jucker Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Berli Jucker Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Berli Jucker is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Krungthai Card and Berli Jucker

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

The idea behind Krungthai Card PCL and Berli Jucker Public 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.