Correlation Between Muangthai Capital and Krungthai Card

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

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

Diversification Opportunities for Muangthai Capital and Krungthai Card

0.48

Correlation Coefficient

Muangthai Capital  Krungthai Card

Very weak diversification

The 3 months correlation between Muangthai and Krungthai is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Muangthai Capital Public and Krungthai Card PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card PCL and Muangthai Capital 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 Muangthai Capital Public are associated (or correlated) with Krungthai Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungthai Card PCL has no effect on the direction of Muangthai Capital i.e., Muangthai Capital and Krungthai Card go up and down completely randomly.

Pair Corralation between Muangthai Capital and Krungthai Card

Assuming the 90 days trading horizon Muangthai Capital Public is expected to under-perform the Krungthai Card. In addition to that, Muangthai Capital is 1.58 times more volatile than Krungthai Card PCL. It trades about 0.0 of its total potential returns per unit of risk. Krungthai Card PCL is currently generating about 0.11 per unit of volatility. If you would invest  4,525  in Krungthai Card PCL on September 13, 2024 and sell it today you would earn a total of  350.00  from holding Krungthai Card PCL or generate 7.73% return on investment over 90 days.

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

Muangthai Capital Public  vs.  Krungthai Card PCL

Muangthai Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muangthai Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Muangthai Capital is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Krungthai Card PCL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Krungthai Card PCL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Krungthai Card may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Muangthai Capital and Krungthai Card

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

The idea behind Muangthai Capital Public and Krungthai Card PCL 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.