Correlation Between CK Power and Thai Reinsurance
Can any of the company-specific risk be diversified away by investing in both CK Power and Thai Reinsurance 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 CK Power and Thai Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Power Public and Thai Reinsurance Public, you can compare the effects of market volatilities on CK Power and Thai Reinsurance 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 CK Power with a short position of Thai Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Thai Reinsurance.
Diversification Opportunities for CK Power and Thai Reinsurance
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CKP and Thai is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Thai Reinsurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Reinsurance Public and CK Power 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 CK Power Public are associated (or correlated) with Thai Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Reinsurance Public has no effect on the direction of CK Power i.e., CK Power and Thai Reinsurance go up and down completely randomly.
Pair Corralation between CK Power and Thai Reinsurance
Assuming the 90 days trading horizon CK Power Public is expected to generate 1.52 times more return on investment than Thai Reinsurance. However, CK Power is 1.52 times more volatile than Thai Reinsurance Public. It trades about -0.07 of its potential returns per unit of risk. Thai Reinsurance Public is currently generating about -0.12 per unit of risk. If you would invest 292.00 in CK Power Public on November 28, 2024 and sell it today you would lose (16.00) from holding CK Power Public or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Power Public vs. Thai Reinsurance Public
Performance |
| Timeline |
| CK Power Public |
| Thai Reinsurance Public |
CK Power and Thai Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Thai Reinsurance
The main advantage of trading using opposite CK Power and Thai Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Thai Reinsurance 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 Reinsurance will offset losses from the drop in Thai Reinsurance's long position.| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
| Thai Reinsurance vs. Thaire Life Assurance | Thai Reinsurance vs. Hana Microelectronics Public | Thai Reinsurance vs. Ratchthani Leasing Public | Thai Reinsurance vs. Siri Prime Office |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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