Correlation Between Kasikornbank Public and True Public

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

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

Diversification Opportunities for Kasikornbank Public and True Public

0.48

Correlation Coefficient

Kasikornbank Public  True Public

Very weak diversification

The 3 months correlation between Kasikornbank and True is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kasikornbank Public and True Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True Public and Kasikornbank Public 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 Kasikornbank Public are associated (or correlated) with True Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True Public has no effect on the direction of Kasikornbank Public i.e., Kasikornbank Public and True Public go up and down completely randomly.

Pair Corralation between Kasikornbank Public and True Public

Assuming the 90 days trading horizon Kasikornbank Public is expected to generate 0.59 times more return on investment than True Public. However, Kasikornbank Public is 1.71 times less risky than True Public. It trades about 0.14 of its potential returns per unit of risk. True Public is currently generating about 0.03 per unit of risk. If you would invest  12,400  in Kasikornbank Public on January 29, 2024 and sell it today you would earn a total of  250.00  from holding Kasikornbank Public or generate 2.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

Kasikornbank Public  vs.  True Public

Kasikornbank Public

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking signals, Kasikornbank Public is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

True Public

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in True Public are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, True Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kasikornbank Public and True Public

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

The idea behind Kasikornbank Public and True 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.