Correlation Between Kasikornbank Public and JAPAN POST

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

Diversification Opportunities for Kasikornbank Public and JAPAN POST

-0.25

Correlation Coefficient

Kasikornbank Public  JAPAN POST

Very good diversification

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

Pair Corralation between Kasikornbank Public and JAPAN POST

Assuming the 90 days horizon Kasikornbank Public Co is expected to generate 1.73 times more return on investment than JAPAN POST. However, Kasikornbank Public is 1.73 times more volatile than JAPAN POST BANK. It trades about 0.0 of its potential returns per unit of risk. JAPAN POST BANK is currently generating about -0.05 per unit of risk. If you would invest  1,798  in Kasikornbank Public Co on November 29, 2024 and sell it today you would lose (87.00) from holding Kasikornbank Public Co or give up 4.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Kasikornbank Public Co  vs.  JAPAN POST BANK

Kasikornbank Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kasikornbank Public Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kasikornbank Public is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

JAPAN POST BANK

Risk-Adjusted Performance

Very Weak

Over the last 90 days JAPAN POST BANK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Kasikornbank Public and JAPAN POST

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

The idea behind Kasikornbank Public Co and JAPAN POST BANK 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.