Correlation Between Krungthai Card and AEON Thana

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

Diversification Opportunities for Krungthai Card and AEON Thana

0.55

Correlation Coefficient

Krungthai Card  AEON Thana

Very weak diversification

The 3 months correlation between Krungthai and AEON is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Krungthai Card PCL and AEON Thana Sinsap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON Thana Sinsap 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 AEON Thana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON Thana Sinsap has no effect on the direction of Krungthai Card i.e., Krungthai Card and AEON Thana go up and down completely randomly.

Pair Corralation between Krungthai Card and AEON Thana

Assuming the 90 days trading horizon Krungthai Card PCL is expected to generate 0.64 times more return on investment than AEON Thana. However, Krungthai Card PCL is 1.55 times less risky than AEON Thana. It trades about 0.13 of its potential returns per unit of risk. AEON Thana Sinsap is currently generating about 0.0 per unit of risk. If you would invest  4,225  in Krungthai Card PCL on September 3, 2024 and sell it today you would earn a total of  450.00  from holding Krungthai Card PCL or generate 10.65% return on investment over 90 days.

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

Krungthai Card PCL  vs.  AEON Thana Sinsap

Krungthai Card PCL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Krungthai Card PCL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Krungthai Card may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AEON Thana Sinsap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEON Thana Sinsap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AEON Thana is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Krungthai Card and AEON Thana

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

The idea behind Krungthai Card PCL and AEON Thana Sinsap 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.