Correlation Between LIFENET INSURANCE and Internet Thailand
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Internet Thailand 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 LIFENET INSURANCE and Internet Thailand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Internet Thailand PCL, you can compare the effects of market volatilities on LIFENET INSURANCE and Internet Thailand 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 LIFENET INSURANCE with a short position of Internet Thailand. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Internet Thailand.
Diversification Opportunities for LIFENET INSURANCE and Internet Thailand
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LIFENET and Internet is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Internet Thailand PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand PCL and LIFENET INSURANCE 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 LIFENET INSURANCE CO are associated (or correlated) with Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand PCL has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Internet Thailand go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Internet Thailand
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to under-perform the Internet Thailand. But the stock apears to be less risky and, when comparing its historical volatility, LIFENET INSURANCE CO is 3.3 times less risky than Internet Thailand. The stock trades about -0.22 of its potential returns per unit of risk. The Internet Thailand PCL is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Internet Thailand PCL on November 28, 2024 and sell it today you would lose (1.00) from holding Internet Thailand PCL or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Internet Thailand PCL
Performance |
| Timeline |
| LIFENET INSURANCE |
| Internet Thailand PCL |
LIFENET INSURANCE and Internet Thailand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Internet Thailand
The main advantage of trading using opposite LIFENET INSURANCE and Internet Thailand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Internet Thailand 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 Internet Thailand will offset losses from the drop in Internet Thailand's long position.| LIFENET INSURANCE vs. WT OFFSHORE | LIFENET INSURANCE vs. Jacquet Metal Service | LIFENET INSURANCE vs. Fortescue Metals Group | LIFENET INSURANCE vs. AEON METALS LTD |
| Internet Thailand vs. Choice Hotels International | Internet Thailand vs. Summit Hotel Properties | Internet Thailand vs. Wyndham Hotels Resorts | Internet Thailand vs. NH HOTEL GROUP |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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