Correlation Between Charan Insurance and Kasikornbank Public

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

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

Diversification Opportunities for Charan Insurance and Kasikornbank Public

-0.24

Correlation Coefficient

Charan Insurance  Kasikornbank Public

Very good diversification

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

Pair Corralation between Charan Insurance and Kasikornbank Public

Assuming the 90 days trading horizon Charan Insurance Public is expected to under-perform the Kasikornbank Public. In addition to that, Charan Insurance is 1.69 times more volatile than Kasikornbank Public. It trades about -0.12 of its total potential returns per unit of risk. Kasikornbank Public is currently generating about 0.1 per unit of volatility. 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Charan Insurance Public  vs.  Kasikornbank Public

Charan Insurance Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charan Insurance Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Charan Insurance 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 Charan Insurance and Kasikornbank Public

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

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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.