Correlation Between Thai Metal and Kasikornbank Public

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

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

Diversification Opportunities for Thai Metal and Kasikornbank Public

-0.04

Correlation Coefficient

Thai Metal  Kasikornbank Public

Good diversification

The 3 months correlation between Thai and Kasikornbank is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Thai Metal Drum and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and Thai Metal 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 Thai Metal Drum 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 Thai Metal i.e., Thai Metal and Kasikornbank Public go up and down completely randomly.

Pair Corralation between Thai Metal and Kasikornbank Public

Assuming the 90 days trading horizon Thai Metal Drum is expected to generate 54.26 times more return on investment than Kasikornbank Public. However, Thai Metal is 54.26 times more volatile than Kasikornbank Public. It trades about 0.06 of its potential returns per unit of risk. Kasikornbank Public is currently generating about 0.04 per unit of risk. If you would invest  2,184  in Thai Metal Drum on October 22, 2024 and sell it today you would earn a total of  276.00  from holding Thai Metal Drum or generate 12.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.17%
Values	Daily Returns

Thai Metal Drum  vs.  Kasikornbank Public

Thai Metal Drum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Metal Drum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Thai Metal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Kasikornbank Public

Risk-Adjusted Performance

14 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 14 (%) 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 February 2025.

Pair Trading with Thai Metal and Kasikornbank Public

The main advantage of trading using opposite Thai Metal and Kasikornbank Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Metal 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 Thai Metal Drum 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.