Correlation Between Krungthai Card and ASIA Capital

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

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

Diversification Opportunities for Krungthai Card and ASIA Capital

0.0

Correlation Coefficient

Krungthai Card  ASIA Capital

Pay attention - limited upside

The 3 months correlation between Krungthai and ASIA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Card PCL and ASIA Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASIA Capital Group 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 PCL are associated (or correlated) with ASIA Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASIA Capital Group has no effect on the direction of Krungthai Card i.e., Krungthai Card and ASIA Capital go up and down completely randomly.

Pair Corralation between Krungthai Card and ASIA Capital

Assuming the 90 days trading horizon Krungthai Card is expected to generate 148.99 times less return on investment than ASIA Capital. But when comparing it to its historical volatility, Krungthai Card PCL is 76.86 times less risky than ASIA Capital. It trades about 0.04 of its potential returns per unit of risk. ASIA Capital Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  33.00  in ASIA Capital Group on December 5, 2024 and sell it today you would lose (33.00) from holding ASIA Capital Group or give up 100.0% of portfolio value over 90 days.

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

Krungthai Card PCL  vs.  ASIA Capital Group

Krungthai Card PCL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Krungthai Card PCL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Krungthai Card is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

ASIA Capital Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASIA Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Krungthai Card and ASIA Capital

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

The idea behind Krungthai Card PCL and ASIA Capital Group 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.