Correlation Between AIM Industrial and Kasikornbank Public

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

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

Diversification Opportunities for AIM Industrial and Kasikornbank Public

0.09

Correlation Coefficient

AIM Industrial  Kasikornbank Public

Significant diversification

The 3 months correlation between AIM and Kasikornbank is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding AIM Industrial Growth and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and AIM Industrial 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 AIM Industrial Growth 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 AIM Industrial i.e., AIM Industrial and Kasikornbank Public go up and down completely randomly.

Pair Corralation between AIM Industrial and Kasikornbank Public

Assuming the 90 days trading horizon AIM Industrial is expected to generate 13.19 times less return on investment than Kasikornbank Public. But when comparing it to its historical volatility, AIM Industrial Growth is 1.44 times less risky than Kasikornbank Public. It trades about 0.01 of its potential returns per unit of risk. Kasikornbank Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  15,000  in Kasikornbank Public on September 24, 2024 and sell it today you would earn a total of  250.00  from holding Kasikornbank Public or generate 1.67% return on investment over 90 days.

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

AIM Industrial Growth  vs.  Kasikornbank Public

AIM Industrial Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIM Industrial Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, AIM Industrial 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

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 AIM Industrial and Kasikornbank Public

The main advantage of trading using opposite AIM Industrial and Kasikornbank Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM Industrial 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 AIM Industrial Growth 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.