Correlation Between Kasikornbank Public and Akkhie Prakarn

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

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

Diversification Opportunities for Kasikornbank Public and Akkhie Prakarn

0.65

Correlation Coefficient

Kasikornbank Public  Akkhie Prakarn

Poor diversification

The 3 months correlation between Kasikornbank and Akkhie is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Akkhie Prakarn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akkhie Prakarn Public and Kasikornbank 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 Kasikornbank Public are associated (or correlated) with Akkhie Prakarn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akkhie Prakarn Public has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Akkhie Prakarn go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Akkhie Prakarn

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 210.15 times less return on investment than Akkhie Prakarn. But when comparing it to its historical volatility, Kasikornbank Public is 113.23 times less risky than Akkhie Prakarn. It trades about 0.07 of its potential returns per unit of risk. Akkhie Prakarn Public is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Akkhie Prakarn Public on September 3, 2024 and sell it today you would earn a total of  72.00  from holding Akkhie Prakarn Public or generate 9.223372036854776E16% return on investment over 90 days.

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

Kasikornbank Public  vs.  Akkhie Prakarn Public

Kasikornbank Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kasikornbank Public is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Akkhie Prakarn Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akkhie Prakarn Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Akkhie Prakarn disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kasikornbank Public and Akkhie Prakarn

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

The idea behind Kasikornbank Public and Akkhie Prakarn 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.