Correlation Between Kasikornbank Public and Kiatnakin Phatra

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

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

Diversification Opportunities for Kasikornbank Public and Kiatnakin Phatra

-0.06

Correlation Coefficient

Kasikornbank Public  Kiatnakin Phatra

Good diversification

The 3 months correlation between Kasikornbank and Kiatnakin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Kiatnakin Phatra Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiatnakin Phatra Bank and Kasikornbank 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 Kasikornbank Public are associated (or correlated) with Kiatnakin Phatra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiatnakin Phatra Bank has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Kiatnakin Phatra go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Kiatnakin Phatra

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 497.05 times less return on investment than Kiatnakin Phatra. But when comparing it to its historical volatility, Kasikornbank Public is 207.78 times less risky than Kiatnakin Phatra. It trades about 0.09 of its potential returns per unit of risk. Kiatnakin Phatra Bank is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  6,300  in Kiatnakin Phatra Bank on April 13, 2024 and sell it today you would lose (1,600) from holding Kiatnakin Phatra Bank or give up 25.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

Kasikornbank Public  vs.  Kiatnakin Phatra Bank

Kasikornbank Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Kiatnakin Phatra Bank

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Kasikornbank Public and Kiatnakin Phatra

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

The idea behind Kasikornbank Public and Kiatnakin Phatra Bank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.