Correlation Between Home Product and Thai Life
Can any of the company-specific risk be diversified away by investing in both Home Product 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 Home Product and Thai Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Product Center and Thai Life Insurance, you can compare the effects of market volatilities on Home Product 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 Home Product with a short position of Thai Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Product and Thai Life.
Diversification Opportunities for Home Product and Thai Life
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Thai is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Home Product Center 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 Home Product 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 Home Product Center 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 Home Product i.e., Home Product and Thai Life go up and down completely randomly.
Pair Corralation between Home Product and Thai Life
Assuming the 90 days trading horizon Home Product Center is expected to under-perform the Thai Life. But the stock apears to be less risky and, when comparing its historical volatility, Home Product Center is 1.24 times less risky than Thai Life. The stock trades about -0.04 of its potential returns per unit of risk. The Thai Life Insurance is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,424 in Thai Life Insurance on August 24, 2024 and sell it today you would lose (384.00) from holding Thai Life Insurance or give up 26.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Product Center vs. Thai Life Insurance
Performance |
| Timeline |
| Home Product Center |
| Thai Life Insurance |
Home Product and Thai Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Product and Thai Life
The main advantage of trading using opposite Home Product and Thai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Product 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.| Home Product vs. SCB X Public | Home Product vs. Kasikornbank Public | Home Product vs. PTT Public | Home Product vs. Kasikornbank Public |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |