Correlation Between Karmarts Public and Kiattana Transport

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

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

Diversification Opportunities for Karmarts Public and Kiattana Transport

0.82

Correlation Coefficient

Karmarts Public  Kiattana Transport

Very poor diversification

The 3 months correlation between Karmarts and Kiattana is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Karmarts Public 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 Karmarts Public 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 Karmarts Public 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 Karmarts Public i.e., Karmarts Public and Kiattana Transport go up and down completely randomly.

Pair Corralation between Karmarts Public and Kiattana Transport

Assuming the 90 days trading horizon Karmarts Public is expected to under-perform the Kiattana Transport. But the stock apears to be less risky and, when comparing its historical volatility, Karmarts Public is 21.88 times less risky than Kiattana Transport. The stock trades about -0.02 of its potential returns per unit of risk. The Kiattana Transport Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Kiattana Transport Public on December 2, 2024 and sell it today you would lose (10.00) from holding Kiattana Transport Public or give up 26.32% of portfolio value over 90 days.

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

Karmarts Public  vs.  Kiattana Transport Public

Karmarts Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Karmarts Public 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kiattana Transport Public

Risk-Adjusted Performance

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Karmarts Public and Kiattana Transport

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