Correlation Between Siam Commercial and Krungthai Card

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

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

Diversification Opportunities for Siam Commercial and Krungthai Card

0.93

Correlation Coefficient

Siam Commercial  Krungthai Card

Almost no diversification

The 3 months correlation between Siam and Krungthai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Commercial and Krungthai Card Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card Public and Siam Commercial 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 The Siam Commercial are associated (or correlated) with Krungthai Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungthai Card Public has no effect on the direction of Siam Commercial i.e., Siam Commercial and Krungthai Card go up and down completely randomly.

Pair Corralation between Siam Commercial and Krungthai Card

Assuming the 90 days trading horizon Siam Commercial is expected to generate 1.25 times less return on investment than Krungthai Card. In addition to that, Siam Commercial is 1.02 times more volatile than Krungthai Card Public. It trades about 0.13 of its total potential returns per unit of risk. Krungthai Card Public is currently generating about 0.17 per unit of volatility. If you would invest  4,604  in Krungthai Card Public on November 29, 2024 and sell it today you would earn a total of  471.00  from holding Krungthai Card Public or generate 10.23% return on investment over 90 days.

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

The Siam Commercial  vs.  Krungthai Card Public

Siam Commercial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Siam Commercial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Siam Commercial may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Krungthai Card Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Krungthai Card Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Krungthai Card may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Siam Commercial and Krungthai Card

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

The idea behind The Siam Commercial and Krungthai Card 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.