Correlation Between Krungthai Card and Amanah Leasing

Can any of the company-specific risk be diversified away by investing in both Krungthai Card and Amanah Leasing 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 Krungthai Card and Amanah Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Krungthai Card Public and Amanah Leasing Public, you can compare the effects of market volatilities on Krungthai Card and Amanah Leasing 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 Krungthai Card with a short position of Amanah Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krungthai Card and Amanah Leasing.

Diversification Opportunities for Krungthai Card and Amanah Leasing

-0.16

Correlation Coefficient

Krungthai Card  Amanah Leasing

Good diversification

The 3 months correlation between Krungthai and Amanah is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Card Public and Amanah Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanah Leasing Public and Krungthai Card 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 Krungthai Card Public are associated (or correlated) with Amanah Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanah Leasing Public has no effect on the direction of Krungthai Card i.e., Krungthai Card and Amanah Leasing go up and down completely randomly.

Pair Corralation between Krungthai Card and Amanah Leasing

Assuming the 90 days trading horizon Krungthai Card Public is expected to generate 0.66 times more return on investment than Amanah Leasing. However, Krungthai Card Public is 1.52 times less risky than Amanah Leasing. It trades about 0.2 of its potential returns per unit of risk. Amanah Leasing Public is currently generating about -0.12 per unit of risk. If you would invest  4,664  in Krungthai Card Public on September 24, 2024 and sell it today you would earn a total of  186.00  from holding Krungthai Card Public or generate 3.99% return on investment over 90 days.

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

Krungthai Card Public  vs.  Amanah Leasing Public

Krungthai Card Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Krungthai Card Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Krungthai Card sustained solid returns over the last few months and may actually be approaching a breakup point.

Amanah Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amanah Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Krungthai Card and Amanah Leasing

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

The idea behind Krungthai Card Public and Amanah Leasing 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.