Correlation Between Kasikornbank Public and First Capital

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

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

Diversification Opportunities for Kasikornbank Public and First Capital

-0.01

Correlation Coefficient

Kasikornbank Public  First Capital

Good diversification

The 3 months correlation between Kasikornbank and First is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public Co and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 Co are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and First Capital go up and down completely randomly.

Pair Corralation between Kasikornbank Public and First Capital

Assuming the 90 days horizon Kasikornbank Public Co is expected to generate 1.84 times more return on investment than First Capital. However, Kasikornbank Public is 1.84 times more volatile than First Capital. It trades about 0.02 of its potential returns per unit of risk. First Capital is currently generating about -0.07 per unit of risk. If you would invest  1,758  in Kasikornbank Public Co on October 3, 2024 and sell it today you would lose (4.00) from holding Kasikornbank Public Co or give up 0.23% of portfolio value over 90 days.

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

Kasikornbank Public Co  vs.  First Capital

Kasikornbank Public

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Kasikornbank Public is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

First Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Kasikornbank Public and First Capital

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

The idea behind Kasikornbank Public Co and First Capital 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.

Check out your portfolio center.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.