Correlation Between Krungthai Card and Professional Waste

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

Diversification Opportunities for Krungthai Card and Professional Waste

1.0

Correlation Coefficient

Krungthai Card  Professional Waste

No risk reduction

The 3 months correlation between Krungthai and Professional is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Card Public and Professional Waste Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Professional Waste 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 Professional Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Professional Waste has no effect on the direction of Krungthai Card i.e., Krungthai Card and Professional Waste go up and down completely randomly.

Pair Corralation between Krungthai Card and Professional Waste

Assuming the 90 days trading horizon Krungthai Card Public is expected to generate 0.05 times more return on investment than Professional Waste. However, Krungthai Card Public is 19.79 times less risky than Professional Waste. It trades about 0.04 of its potential returns per unit of risk. Professional Waste Technology is currently generating about -0.24 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  36.00  from holding Krungthai Card Public or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	94.74%
Values	Daily Returns

Krungthai Card Public  vs.  Professional Waste Technology

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.

Professional Waste

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Professional Waste Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Professional Waste disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Krungthai Card and Professional Waste

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

The idea behind Krungthai Card Public and Professional Waste Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.