Correlation Between Kingsmen CMTI and Thai Ha

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

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

Diversification Opportunities for Kingsmen CMTI and Thai Ha

-0.71

Correlation Coefficient

Kingsmen CMTI  Thai Ha

Pay attention - limited upside

The 3 months correlation between Kingsmen and Thai is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kingsmen CMTI Public and Thai Ha Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Ha Public and Kingsmen CMTI 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 Kingsmen CMTI Public are associated (or correlated) with Thai Ha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Ha Public has no effect on the direction of Kingsmen CMTI i.e., Kingsmen CMTI and Thai Ha go up and down completely randomly.

Pair Corralation between Kingsmen CMTI and Thai Ha

Given the investment horizon of 90 days Kingsmen CMTI Public is expected to generate 0.72 times more return on investment than Thai Ha. However, Kingsmen CMTI Public is 1.38 times less risky than Thai Ha. It trades about 0.19 of its potential returns per unit of risk. Thai Ha Public is currently generating about -0.24 per unit of risk. If you would invest  118.00  in Kingsmen CMTI Public on December 27, 2024 and sell it today you would earn a total of  32.00  from holding Kingsmen CMTI Public or generate 27.12% return on investment over 90 days.

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

Kingsmen CMTI Public  vs.  Thai Ha Public

Kingsmen CMTI Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsmen CMTI Public are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Kingsmen CMTI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Thai Ha Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Ha 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kingsmen CMTI and Thai Ha

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

The idea behind Kingsmen CMTI Public and Thai Ha 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.