Correlation Between Cardano and Thai Life
Can any of the company-specific risk be diversified away by investing in both Cardano and Thai Life 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 Cardano and Thai Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Thai Life Insurance, you can compare the effects of market volatilities on Cardano and Thai Life 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 Cardano with a short position of Thai Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Thai Life.
Diversification Opportunities for Cardano and Thai Life
Good diversification
The 3 months correlation between Cardano and Thai is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Thai Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Life Insurance and Cardano 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 Cardano are associated (or correlated) with Thai Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Life Insurance has no effect on the direction of Cardano i.e., Cardano and Thai Life go up and down completely randomly.
Pair Corralation between Cardano and Thai Life
Assuming the 90 days trading horizon Cardano is expected to under-perform the Thai Life. In addition to that, Cardano is 2.3 times more volatile than Thai Life Insurance. It trades about -0.12 of its total potential returns per unit of risk. Thai Life Insurance is currently generating about 0.06 per unit of volatility. If you would invest 1,080 in Thai Life Insurance on November 2, 2024 and sell it today you would earn a total of 20.00 from holding Thai Life Insurance or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardano vs. Thai Life Insurance
Performance |
| Timeline |
| Cardano |
| Thai Life Insurance |
Cardano and Thai Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Thai Life
The main advantage of trading using opposite Cardano and Thai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Thai Life 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 Thai Life will offset losses from the drop in Thai Life's long position.The idea behind Cardano and Thai Life Insurance 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.| Thai Life vs. Bangkok Life Assurance | Thai Life vs. PTT Oil and | Thai Life vs. Home Product Center | Thai Life vs. Muangthai Capital Public |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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