Correlation Between AJ Plast and Krung Thai
Can any of the company-specific risk be diversified away by investing in both AJ Plast and Krung Thai 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 AJ Plast and Krung Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Plast Public and Krung Thai Bank, you can compare the effects of market volatilities on AJ Plast and Krung Thai 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 AJ Plast with a short position of Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Krung Thai.
Diversification Opportunities for AJ Plast and Krung Thai
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AJ Plast and Krung is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast Public and Krung Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krung Thai Bank and AJ Plast 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 AJ Plast Public are associated (or correlated) with Krung Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krung Thai Bank has no effect on the direction of AJ Plast i.e., AJ Plast and Krung Thai go up and down completely randomly.
Pair Corralation between AJ Plast and Krung Thai
Assuming the 90 days horizon AJ Plast Public is expected to under-perform the Krung Thai. In addition to that, AJ Plast is 2.04 times more volatile than Krung Thai Bank. It trades about -0.41 of its total potential returns per unit of risk. Krung Thai Bank is currently generating about 0.15 per unit of volatility. If you would invest 2,040 in Krung Thai Bank on November 20, 2024 and sell it today you would earn a total of 270.00 from holding Krung Thai Bank or generate 13.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AJ Plast Public vs. Krung Thai Bank
Performance |
Timeline |
AJ Plast Public |
Krung Thai Bank |
AJ Plast and Krung Thai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AJ Plast and Krung Thai
The main advantage of trading using opposite AJ Plast and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast position performs unexpectedly, Krung Thai 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 Krung Thai will offset losses from the drop in Krung Thai's long position.AJ Plast vs. AAPICO Hitech Public | ||
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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