Correlation Between Kasikornbank Public and Sonic Interfreight

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Can any of the company-specific risk be diversified away by investing in both Kasikornbank Public and Sonic Interfreight 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 Sonic Interfreight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasikornbank Public and Sonic Interfreight Public, you can compare the effects of market volatilities on Kasikornbank Public and Sonic Interfreight 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 Sonic Interfreight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasikornbank Public and Sonic Interfreight.

Diversification Opportunities for Kasikornbank Public and Sonic Interfreight

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between Kasikornbank and Sonic is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and Sonic Interfreight Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Interfreight 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 Sonic Interfreight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonic Interfreight Public has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and Sonic Interfreight go up and down completely randomly.

Pair Corralation between Kasikornbank Public and Sonic Interfreight

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 0.56 times more return on investment than Sonic Interfreight. However, Kasikornbank Public is 1.8 times less risky than Sonic Interfreight. It trades about 0.02 of its potential returns per unit of risk. Sonic Interfreight Public is currently generating about -0.03 per unit of risk. If you would invest  14,169  in Kasikornbank Public on October 5, 2024 and sell it today you would earn a total of  1,331  from holding Kasikornbank Public or generate 9.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Kasikornbank Public  vs.  Sonic Interfreight Public

 Performance 
       Timeline  
Kasikornbank Public 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
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. 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.
Sonic Interfreight Public 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Sonic Interfreight Public are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Sonic Interfreight may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kasikornbank Public and Sonic Interfreight Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kasikornbank Public and Sonic Interfreight

The main advantage of trading using opposite Kasikornbank Public and Sonic Interfreight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasikornbank Public position performs unexpectedly, Sonic Interfreight 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 Sonic Interfreight will offset losses from the drop in Sonic Interfreight's long position.
The idea behind Kasikornbank Public and Sonic Interfreight 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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