Correlation Between DOHOME and Kiattana Transport

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

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

Diversification Opportunities for DOHOME and Kiattana Transport

0.77

Correlation Coefficient

DOHOME  Kiattana Transport

Poor diversification

The 3 months correlation between DOHOME and Kiattana is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding DOHOME 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 DOHOME 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 DOHOME 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 DOHOME i.e., DOHOME and Kiattana Transport go up and down completely randomly.

Pair Corralation between DOHOME and Kiattana Transport

Assuming the 90 days trading horizon DOHOME is expected to generate 1.02 times more return on investment than Kiattana Transport. However, DOHOME is 1.02 times more volatile than Kiattana Transport Public. It trades about -0.09 of its potential returns per unit of risk. Kiattana Transport Public is currently generating about -0.1 per unit of risk. If you would invest  995.00  in DOHOME on October 23, 2024 and sell it today you would lose (125.00) from holding DOHOME or give up 12.56% of portfolio value over 90 days.

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

DOHOME  vs.  Kiattana Transport Public

DOHOME

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DOHOME has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company 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 DOHOME and Kiattana Transport

The main advantage of trading using opposite DOHOME and Kiattana Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOHOME 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 DOHOME 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.