Correlation Between Kasikornbank Public and Charan Insurance

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

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

Diversification Opportunities for Kasikornbank Public and Charan Insurance

-0.65

Correlation Coefficient

Kasikornbank Public  Charan Insurance

Excellent diversification

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

Pair Corralation between Kasikornbank Public and Charan Insurance

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 0.38 times more return on investment than Charan Insurance. However, Kasikornbank Public is 2.66 times less risky than Charan Insurance. It trades about 0.07 of its potential returns per unit of risk. Charan Insurance Public is currently generating about -0.07 per unit of risk. If you would invest  15,400  in Kasikornbank Public on October 13, 2024 and sell it today you would earn a total of  550.00  from holding Kasikornbank Public or generate 3.57% return on investment over 90 days.

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

Kasikornbank Public  vs.  Charan Insurance 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.

Charan Insurance Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charan Insurance Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kasikornbank Public and Charan Insurance

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

The idea behind Kasikornbank Public and Charan Insurance 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.