Correlation Between Kiatnakin Phatra and ALT Telecom

Can any of the company-specific risk be diversified away by investing in both Kiatnakin Phatra and ALT Telecom 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 Kiatnakin Phatra and ALT Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Kiatnakin Phatra and ALT Telecom

-0.25

Correlation Coefficient

Kiatnakin Phatra  ALT Telecom

Very good diversification

The 3 months correlation between Kiatnakin and ALT is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank and ALT Telecom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALT Telecom Public and Kiatnakin Phatra 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 Kiatnakin Phatra Bank are associated (or correlated) with ALT Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALT Telecom Public has no effect on the direction of Kiatnakin Phatra i.e., Kiatnakin Phatra and ALT Telecom go up and down completely randomly.

Pair Corralation between Kiatnakin Phatra and ALT Telecom

Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to under-perform the ALT Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Kiatnakin Phatra Bank is 30.46 times less risky than ALT Telecom. The stock trades about -0.02 of its potential returns per unit of risk. The ALT Telecom Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  234.00  in ALT Telecom Public on October 11, 2024 and sell it today you would lose (131.00) from holding ALT Telecom Public or give up 55.98% of portfolio value over 90 days.

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

Kiatnakin Phatra Bank  vs.  ALT Telecom Public

Kiatnakin Phatra Bank

Risk-Adjusted Performance

1 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kiatnakin Phatra Bank are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Kiatnakin Phatra is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

ALT Telecom Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALT Telecom Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Kiatnakin Phatra and ALT Telecom

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

The idea behind Kiatnakin Phatra Bank and ALT Telecom 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.