Correlation Between Visa and Kasikornbank Public

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

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

Diversification Opportunities for Visa and Kasikornbank Public

-0.43

Correlation Coefficient

Visa  Kasikornbank Public

Very good diversification

The 3 months correlation between Visa and Kasikornbank is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kasikornbank Public Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank Public and Visa 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 Visa Class A 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 Visa i.e., Visa and Kasikornbank Public go up and down completely randomly.

Pair Corralation between Visa and Kasikornbank Public

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.42 times more return on investment than Kasikornbank Public. However, Visa Class A is 2.36 times less risky than Kasikornbank Public. It trades about 0.33 of its potential returns per unit of risk. Kasikornbank Public Co is currently generating about 0.01 per unit of risk. If you would invest  28,960  in Visa Class A on August 31, 2024 and sell it today you would earn a total of  2,510  from holding Visa Class A or generate 8.67% return on investment over 90 days.

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

Visa Class A  vs.  Kasikornbank Public Co

Visa Class A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Kasikornbank Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kasikornbank Public may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Visa and Kasikornbank Public

The main advantage of trading using opposite Visa and Kasikornbank Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A and Kasikornbank Public Co 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.