Correlation Between Srisawad Public and Krungthai Card

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

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

Diversification Opportunities for Srisawad Public and Krungthai Card

0.99

Correlation Coefficient

Srisawad Public  Krungthai Card

No risk reduction

The 3 months correlation between Srisawad and Krungthai is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Srisawad Public and Krungthai Card Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card Public and Srisawad 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 Srisawad 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 Public has no effect on the direction of Srisawad Public i.e., Srisawad Public and Krungthai Card go up and down completely randomly.

Pair Corralation between Srisawad Public and Krungthai Card

Assuming the 90 days trading horizon Srisawad Public is expected to generate 1.01 times less return on investment than Krungthai Card. In addition to that, Srisawad Public is 1.0 times more volatile than Krungthai Card Public. It trades about 0.11 of its total potential returns per unit of risk. Krungthai Card Public is currently generating about 0.11 per unit of volatility. If you would invest  4,688  in Krungthai Card Public on September 12, 2024 and sell it today you would earn a total of  87.00  from holding Krungthai Card Public or generate 1.86% return on investment over 90 days.

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

Srisawad Public  vs.  Krungthai Card Public

Srisawad Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Srisawad Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Srisawad Public reported solid returns over the last few months and may actually be approaching a breakup point.

Krungthai Card Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Krungthai Card Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Krungthai Card sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Srisawad Public and Krungthai Card

The main advantage of trading using opposite Srisawad Public and Krungthai Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Srisawad Public 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 Srisawad Public and Krungthai Card 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.