Correlation Between AIM Industrial and Thai Life
Can any of the company-specific risk be diversified away by investing in both AIM Industrial 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 AIM Industrial and Thai Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM Industrial Growth and Thai Life Insurance, you can compare the effects of market volatilities on AIM Industrial 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 AIM Industrial with a short position of Thai Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM Industrial and Thai Life.
Diversification Opportunities for AIM Industrial and Thai Life
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AIM and Thai is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AIM Industrial Growth 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 AIM Industrial 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 AIM Industrial Growth 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 AIM Industrial i.e., AIM Industrial and Thai Life go up and down completely randomly.
Pair Corralation between AIM Industrial and Thai Life
Assuming the 90 days trading horizon AIM Industrial is expected to generate 2.39 times less return on investment than Thai Life. But when comparing it to its historical volatility, AIM Industrial Growth is 2.23 times less risky than Thai Life. It trades about 0.02 of its potential returns per unit of risk. Thai Life Insurance is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Thai Life Insurance on September 14, 2024 and sell it today you would earn a total of 85.00 from holding Thai Life Insurance or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIM Industrial Growth vs. Thai Life Insurance
Performance |
| Timeline |
| AIM Industrial Growth |
| Thai Life Insurance |
AIM Industrial and Thai Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM Industrial and Thai Life
The main advantage of trading using opposite AIM Industrial and Thai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM Industrial 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.| AIM Industrial vs. Amata Summit Growth | AIM Industrial vs. WHA Premium Growth | AIM Industrial vs. Digital Telecommunications Infrastructure | AIM Industrial vs. Quality Houses Property |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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