Correlation Between Kiatnakin Phatra and Digital Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Kiatnakin Phatra and Digital Telecommunicatio 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 Kiatnakin Phatra and Digital Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kiatnakin Phatra Bank and Digital Telecommunications Infrastructure, you can compare the effects of market volatilities on Kiatnakin Phatra and Digital Telecommunicatio 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 Kiatnakin Phatra with a short position of Digital Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiatnakin Phatra and Digital Telecommunicatio.

Diversification Opportunities for Kiatnakin Phatra and Digital Telecommunicatio

0.42

Correlation Coefficient

Kiatnakin Phatra  Digital Telecommunicatio

Very weak diversification

The 3 months correlation between Kiatnakin and Digital is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank and Digital Telecommunications Inf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Telecommunicatio and Kiatnakin Phatra 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 Kiatnakin Phatra Bank are associated (or correlated) with Digital Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Telecommunicatio has no effect on the direction of Kiatnakin Phatra i.e., Kiatnakin Phatra and Digital Telecommunicatio go up and down completely randomly.

Pair Corralation between Kiatnakin Phatra and Digital Telecommunicatio

Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to under-perform the Digital Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Kiatnakin Phatra Bank is 1.19 times less risky than Digital Telecommunicatio. The stock trades about -0.5 of its potential returns per unit of risk. The Digital Telecommunications Infrastructure is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  773.00  in Digital Telecommunications Infrastructure on March 12, 2024 and sell it today you would earn a total of  7.00  from holding Digital Telecommunications Infrastructure or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Kiatnakin Phatra Bank  vs.  Digital Telecommunications Inf

Kiatnakin Phatra Bank

Risk-Adjusted Performance

0 of 100

Very Weak

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

Digital Telecommunicatio

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Digital Telecommunications Infrastructure are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Digital Telecommunicatio is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Kiatnakin Phatra and Digital Telecommunicatio

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

The idea behind Kiatnakin Phatra Bank and Digital Telecommunications Infrastructure 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.