Correlation Between Srisawad Power and Krungthai Card

Can any of the company-specific risk be diversified away by investing in both Srisawad Power 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 Power 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 Power 1979 and Krungthai Card Public, you can compare the effects of market volatilities on Srisawad Power 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 Power with a short position of Krungthai Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Srisawad Power and Krungthai Card.

Diversification Opportunities for Srisawad Power and Krungthai Card

-0.17

Correlation Coefficient

Srisawad Power  Krungthai Card

Good diversification

The 3 months correlation between Srisawad and Krungthai is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Srisawad Power 1979 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 Power 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 Power 1979 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 Power i.e., Srisawad Power and Krungthai Card go up and down completely randomly.

Pair Corralation between Srisawad Power and Krungthai Card

Assuming the 90 days trading horizon Srisawad Power 1979 is expected to under-perform the Krungthai Card. But the stock apears to be less risky and, when comparing its historical volatility, Srisawad Power 1979 is 60.87 times less risky than Krungthai Card. The stock trades about -0.03 of its potential returns per unit of risk. The Krungthai Card Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Srisawad Power 1979  vs.  Krungthai Card Public

Srisawad Power 1979

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Srisawad Power 1979 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Srisawad Power is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 Power and Krungthai Card

The main advantage of trading using opposite Srisawad Power and Krungthai Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Srisawad Power 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 Power 1979 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.