Correlation Between Kiatnakin Phatra and WHA Public

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

Diversification Opportunities for Kiatnakin Phatra and WHA Public

0.77

Correlation Coefficient

Kiatnakin Phatra  WHA Public

Poor diversification

The 3 months correlation between Kiatnakin and WHA is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kiatnakin Phatra Bank and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA 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 WHA Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Public has no effect on the direction of Kiatnakin Phatra i.e., Kiatnakin Phatra and WHA Public go up and down completely randomly.

Pair Corralation between Kiatnakin Phatra and WHA Public

Assuming the 90 days trading horizon Kiatnakin Phatra Bank is expected to under-perform the WHA Public. But the stock apears to be less risky and, when comparing its historical volatility, Kiatnakin Phatra Bank is 1.63 times less risky than WHA Public. The stock trades about -0.23 of its potential returns per unit of risk. The WHA Public is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  568.00  in WHA Public on August 31, 2024 and sell it today you would lose (8.00) from holding WHA Public or give up 1.41% of portfolio value over 90 days.

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

Kiatnakin Phatra Bank  vs.  WHA 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.

WHA Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WHA Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, WHA Public may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Kiatnakin Phatra and WHA Public

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

The idea behind Kiatnakin Phatra Bank and WHA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.