Correlation Between Indara Insurance and Thai Life
Can any of the company-specific risk be diversified away by investing in both Indara Insurance 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 Indara Insurance and Thai Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indara Insurance Public and Thai Life Insurance, you can compare the effects of market volatilities on Indara Insurance 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 Indara Insurance with a short position of Thai Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indara Insurance and Thai Life.
Diversification Opportunities for Indara Insurance and Thai Life
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indara and Thai is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public 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 Indara 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 Indara Insurance Public 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 Indara Insurance i.e., Indara Insurance and Thai Life go up and down completely randomly.
Pair Corralation between Indara Insurance and Thai Life
Assuming the 90 days trading horizon Indara Insurance Public is expected to generate 29.32 times more return on investment than Thai Life. However, Indara Insurance is 29.32 times more volatile than Thai Life Insurance. It trades about 0.05 of its potential returns per unit of risk. Thai Life Insurance is currently generating about 0.03 per unit of risk. If you would invest 11,500 in Indara Insurance Public on September 14, 2024 and sell it today you would lose (3,600) from holding Indara Insurance Public or give up 31.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indara Insurance Public vs. Thai Life Insurance
Performance |
| Timeline |
| Indara Insurance Public |
| Thai Life Insurance |
Indara Insurance and Thai Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indara Insurance and Thai Life
The main advantage of trading using opposite Indara Insurance and Thai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indara Insurance 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.| Indara Insurance vs. KGI Securities Public | Indara Insurance vs. Lalin Property Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. MCS Steel 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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