Correlation Between Kasikornbank Public and Siam Commercial

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

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

Diversification Opportunities for Kasikornbank Public and Siam Commercial

0.27

Correlation Coefficient

Kasikornbank Public  Siam Commercial

Modest diversification

The 3 months correlation between Kasikornbank and Siam is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and The Siam Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Commercial 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 Siam Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Commercial has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Siam Commercial go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Siam Commercial

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 14.05 times less return on investment than Siam Commercial. In addition to that, Kasikornbank Public is 1.2 times more volatile than The Siam Commercial. It trades about 0.01 of its total potential returns per unit of risk. The Siam Commercial is currently generating about 0.1 per unit of volatility. If you would invest  11,479  in The Siam Commercial on December 1, 2024 and sell it today you would earn a total of  721.00  from holding The Siam Commercial or generate 6.28% return on investment over 90 days.

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

Kasikornbank Public  vs.  The Siam Commercial

Kasikornbank Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kasikornbank Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Kasikornbank Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Siam Commercial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Siam Commercial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Siam Commercial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kasikornbank Public and Siam Commercial

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

The idea behind Kasikornbank Public and The Siam Commercial 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.