Correlation Between KTAM Gold and ThaiDex SET50

Can any of the company-specific risk be diversified away by investing in both KTAM Gold and ThaiDex SET50 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 KTAM Gold and ThaiDex SET50 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KTAM Gold ETF and ThaiDex SET50 Exchange, you can compare the effects of market volatilities on KTAM Gold and ThaiDex SET50 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 KTAM Gold with a short position of ThaiDex SET50. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTAM Gold and ThaiDex SET50.

Diversification Opportunities for KTAM Gold and ThaiDex SET50

0.49

Correlation Coefficient

KTAM Gold  ThaiDex SET50

Very weak diversification

The 3 months correlation between KTAM and ThaiDex is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KTAM Gold ETF and ThaiDex SET50 Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThaiDex SET50 Exchange and KTAM Gold 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 KTAM Gold ETF are associated (or correlated) with ThaiDex SET50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThaiDex SET50 Exchange has no effect on the direction of KTAM Gold i.e., KTAM Gold and ThaiDex SET50 go up and down completely randomly.

Pair Corralation between KTAM Gold and ThaiDex SET50

Assuming the 90 days trading horizon KTAM Gold ETF is expected to generate 1.22 times more return on investment than ThaiDex SET50. However, KTAM Gold is 1.22 times more volatile than ThaiDex SET50 Exchange. It trades about -0.09 of its potential returns per unit of risk. ThaiDex SET50 Exchange is currently generating about -0.45 per unit of risk. If you would invest  367.00  in KTAM Gold ETF on September 22, 2024 and sell it today you would lose (5.00) from holding KTAM Gold ETF or give up 1.36% of portfolio value over 90 days.

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

KTAM Gold ETF  vs.  ThaiDex SET50 Exchange

KTAM Gold ETF

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KTAM Gold ETF are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, KTAM Gold is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

ThaiDex SET50 Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThaiDex SET50 Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, ThaiDex SET50 is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with KTAM Gold and ThaiDex SET50

The main advantage of trading using opposite KTAM Gold and ThaiDex SET50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTAM Gold position performs unexpectedly, ThaiDex SET50 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 ThaiDex SET50 will offset losses from the drop in ThaiDex SET50's long position.

The idea behind KTAM Gold ETF and ThaiDex SET50 Exchange 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.