Correlation Between Kasikornbank Public and Thantawan Industry

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

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

Diversification Opportunities for Kasikornbank Public and Thantawan Industry

0.77

Correlation Coefficient

Kasikornbank Public  Thantawan Industry

Poor diversification

The 3 months correlation between Kasikornbank and Thantawan is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Thantawan Industry Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thantawan Industry Public 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 Thantawan Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thantawan Industry Public has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Thantawan Industry go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Thantawan Industry

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 1.07 times less return on investment than Thantawan Industry. But when comparing it to its historical volatility, Kasikornbank Public is 1.16 times less risky than Thantawan Industry. It trades about 0.08 of its potential returns per unit of risk. Thantawan Industry Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,420  in Thantawan Industry Public on June 20, 2024 and sell it today you would earn a total of  505.00  from holding Thantawan Industry Public or generate 20.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.5%
Values	Daily Returns

Kasikornbank Public  vs.  Thantawan Industry Public

Kasikornbank Public

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kasikornbank Public reported solid returns over the last few months and may actually be approaching a breakup point.

Thantawan Industry Public

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thantawan Industry Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Thantawan Industry may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pair Trading with Kasikornbank Public and Thantawan Industry

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

The idea behind Kasikornbank Public and Thantawan Industry 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.