Correlation Between TISCO Financial and Kasikornbank Public

Can any of the company-specific risk be diversified away by investing in both TISCO Financial and Kasikornbank Public 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 TISCO Financial and Kasikornbank Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for TISCO Financial and Kasikornbank Public

0.71

Correlation Coefficient

TISCO Financial  Kasikornbank Public

Poor diversification

The 3 months correlation between TISCO and Kasikornbank is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding TISCO Financial Group and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and TISCO Financial 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 TISCO Financial Group are associated (or correlated) with Kasikornbank Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasikornbank Public has no effect on the direction of TISCO Financial i.e., TISCO Financial and Kasikornbank Public go up and down completely randomly.

Pair Corralation between TISCO Financial and Kasikornbank Public

Assuming the 90 days trading horizon TISCO Financial is expected to generate 2.2 times less return on investment than Kasikornbank Public. But when comparing it to its historical volatility, TISCO Financial Group is 1.98 times less risky than Kasikornbank Public. It trades about 0.09 of its potential returns per unit of risk. Kasikornbank Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  14,014  in Kasikornbank Public on September 2, 2024 and sell it today you would earn a total of  1,036  from holding Kasikornbank Public or generate 7.39% return on investment over 90 days.

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

TISCO Financial Group  vs.  Kasikornbank Public

TISCO Financial Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TISCO Financial Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, TISCO Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kasikornbank Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Kasikornbank Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TISCO Financial and Kasikornbank Public

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

The idea behind TISCO Financial Group and Kasikornbank 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.