Correlation Between Kasikornbank Public and Grande Hospitality

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

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

Diversification Opportunities for Kasikornbank Public and Grande Hospitality

-0.35

Correlation Coefficient

Kasikornbank Public  Grande Hospitality

Very good diversification

The 3 months correlation between Kasikornbank and Grande is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Grande Hospitality Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Hospitality Real 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 Grande Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Hospitality Real has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Grande Hospitality go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Grande Hospitality

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 1.42 times more return on investment than Grande Hospitality. However, Kasikornbank Public is 1.42 times more volatile than Grande Hospitality Real. It trades about 0.06 of its potential returns per unit of risk. Grande Hospitality Real is currently generating about 0.01 per unit of risk. If you would invest  15,600  in Kasikornbank Public on December 27, 2024 and sell it today you would earn a total of  650.00  from holding Kasikornbank Public or generate 4.17% return on investment over 90 days.

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

Kasikornbank Public  vs.  Grande Hospitality Real

Kasikornbank Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 4 (%) 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.

Grande Hospitality Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grande Hospitality Real has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Grande Hospitality is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kasikornbank Public and Grande Hospitality

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

The idea behind Kasikornbank Public and Grande Hospitality Real 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.