Correlation Between Thaire Life and Kasikornbank Public

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

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

Diversification Opportunities for Thaire Life and Kasikornbank Public

-0.29

Correlation Coefficient

Thaire Life  Kasikornbank Public

Very good diversification

The 3 months correlation between Thaire and Kasikornbank is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Thaire Life Assurance and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and Thaire Life 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 Thaire Life Assurance are associated (or correlated) with Kasikornbank Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasikornbank Public has no effect on the direction of Thaire Life i.e., Thaire Life and Kasikornbank Public go up and down completely randomly.

Pair Corralation between Thaire Life and Kasikornbank Public

Assuming the 90 days trading horizon Thaire Life Assurance is expected to under-perform the Kasikornbank Public. In addition to that, Thaire Life is 1.29 times more volatile than Kasikornbank Public. It trades about -0.19 of its total potential returns per unit of risk. Kasikornbank Public is currently generating about 0.08 per unit of volatility. If you would invest  15,000  in Kasikornbank Public on September 28, 2024 and sell it today you would earn a total of  700.00  from holding Kasikornbank Public or generate 4.67% return on investment over 90 days.

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

Thaire Life Assurance  vs.  Kasikornbank Public

Thaire Life Assurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thaire Life Assurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Kasikornbank Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Kasikornbank Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thaire Life and Kasikornbank Public

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

The idea behind Thaire Life Assurance and Kasikornbank 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.