Correlation Between Thai Oil and Kasikornbank Public

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

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

Diversification Opportunities for Thai Oil and Kasikornbank Public

-0.03

Correlation Coefficient

Thai Oil  Kasikornbank Public

Good diversification

The 3 months correlation between Thai and Kasikornbank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and Thai Oil 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 Thai Oil Public 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 Thai Oil i.e., Thai Oil and Kasikornbank Public go up and down completely randomly.

Pair Corralation between Thai Oil and Kasikornbank Public

Assuming the 90 days trading horizon Thai Oil Public is expected to generate 136.44 times more return on investment than Kasikornbank Public. However, Thai Oil is 136.44 times more volatile than Kasikornbank Public. It trades about 0.11 of its potential returns per unit of risk. Kasikornbank Public is currently generating about -0.03 per unit of risk. If you would invest  4,625  in Thai Oil Public on September 12, 2024 and sell it today you would lose (825.00) from holding Thai Oil Public or give up 17.84% of portfolio value over 90 days.

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

Thai Oil Public  vs.  Kasikornbank Public

Thai Oil Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Oil Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Thai Oil sustained solid returns over the last few months and may actually be approaching a breakup point.

Kasikornbank Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kasikornbank Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Kasikornbank Public is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Thai Oil and Kasikornbank Public

The main advantage of trading using opposite Thai Oil and Kasikornbank Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Oil 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 Thai Oil Public 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.