Correlation Between Dexon Technology and Kiattana Transport

Can any of the company-specific risk be diversified away by investing in both Dexon Technology and Kiattana Transport 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 Dexon Technology and Kiattana Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Dexon Technology and Kiattana Transport

0.86

Correlation Coefficient

Dexon Technology  Kiattana Transport

Very poor diversification

The 3 months correlation between Dexon and Kiattana is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dexon Technology PCL and Kiattana Transport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiattana Transport Public and Dexon Technology 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 Dexon Technology PCL are associated (or correlated) with Kiattana Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiattana Transport Public has no effect on the direction of Dexon Technology i.e., Dexon Technology and Kiattana Transport go up and down completely randomly.

Pair Corralation between Dexon Technology and Kiattana Transport

Assuming the 90 days trading horizon Dexon Technology PCL is expected to generate 1.06 times more return on investment than Kiattana Transport. However, Dexon Technology is 1.06 times more volatile than Kiattana Transport Public. It trades about 0.04 of its potential returns per unit of risk. Kiattana Transport Public is currently generating about -0.05 per unit of risk. If you would invest  157.00  in Dexon Technology PCL on October 8, 2024 and sell it today you would earn a total of  2.00  from holding Dexon Technology PCL or generate 1.27% return on investment over 90 days.

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

Dexon Technology PCL  vs.  Kiattana Transport Public

Dexon Technology PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dexon Technology PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Dexon Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Kiattana Transport Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kiattana Transport Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Dexon Technology and Kiattana Transport

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

The idea behind Dexon Technology PCL and Kiattana Transport 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.