Correlation Between Auburn Bancorp and Kasikornbank Public

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

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

Diversification Opportunities for Auburn Bancorp and Kasikornbank Public

0.24

Correlation Coefficient

Auburn Bancorp  Kasikornbank Public

Modest diversification

The 3 months correlation between Auburn and Kasikornbank is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Auburn Bancorp and Kasikornbank Public Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and Auburn Bancorp 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 Auburn Bancorp 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 Auburn Bancorp i.e., Auburn Bancorp and Kasikornbank Public go up and down completely randomly.

Pair Corralation between Auburn Bancorp and Kasikornbank Public

Given the investment horizon of 90 days Auburn Bancorp is expected to generate 0.97 times more return on investment than Kasikornbank Public. However, Auburn Bancorp is 1.03 times less risky than Kasikornbank Public. It trades about 0.02 of its potential returns per unit of risk. Kasikornbank Public Co is currently generating about -0.03 per unit of risk. If you would invest  856.00  in Auburn Bancorp on December 2, 2024 and sell it today you would earn a total of  1.00  from holding Auburn Bancorp or generate 0.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Auburn Bancorp  vs.  Kasikornbank Public Co

Auburn Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Auburn Bancorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Auburn Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kasikornbank Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kasikornbank Public showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auburn Bancorp and Kasikornbank Public

The main advantage of trading using opposite Auburn Bancorp and Kasikornbank Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn Bancorp 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 Auburn Bancorp and Kasikornbank Public Co 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.