Correlation Between Kiatnakin Phatra and AP Public

Can any of the company-specific risk be diversified away by investing in both Kiatnakin Phatra and AP Public 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 AP Public 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 AP Public, you can compare the effects of market volatilities on Kiatnakin Phatra and AP Public 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 AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiatnakin Phatra and AP Public.

Diversification Opportunities for Kiatnakin Phatra and AP Public

0.33

Correlation Coefficient

Kiatnakin Phatra  AP Public

Weak diversification

The 3 months correlation between Kiatnakin and AP Public is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP 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 AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Kiatnakin Phatra i.e., Kiatnakin Phatra and AP Public go up and down completely randomly.

Pair Corralation between Kiatnakin Phatra and AP Public

Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to generate 0.96 times more return on investment than AP Public. However, Kiatnakin Phatra Bank is 1.04 times less risky than AP Public. It trades about 0.12 of its potential returns per unit of risk. AP Public is currently generating about 0.04 per unit of risk. If you would invest  4,403  in Kiatnakin Phatra Bank on September 1, 2024 and sell it today you would earn a total of  597.00  from holding Kiatnakin Phatra Bank or generate 13.56% return on investment over 90 days.

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

Kiatnakin Phatra Bank  vs.  AP Public

Kiatnakin Phatra Bank

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kiatnakin Phatra Bank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Kiatnakin Phatra disclosed solid returns over the last few months and may actually be approaching a breakup point.

AP Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AP Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, AP Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Kiatnakin Phatra and AP Public

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

The idea behind Kiatnakin Phatra Bank and AP 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.