Correlation Between Muang Thai and Charan Insurance
Can any of the company-specific risk be diversified away by investing in both Muang Thai and Charan Insurance 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 Muang Thai and Charan Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muang Thai Insurance and Charan Insurance Public, you can compare the effects of market volatilities on Muang Thai and Charan Insurance 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 Muang Thai with a short position of Charan Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muang Thai and Charan Insurance.
Diversification Opportunities for Muang Thai and Charan Insurance
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Muang and Charan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Muang Thai Insurance and Charan Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charan Insurance Public and Muang Thai 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 Muang Thai Insurance are associated (or correlated) with Charan Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charan Insurance Public has no effect on the direction of Muang Thai i.e., Muang Thai and Charan Insurance go up and down completely randomly.
Pair Corralation between Muang Thai and Charan Insurance
Assuming the 90 days trading horizon Muang Thai Insurance is expected to generate 1.0 times more return on investment than Charan Insurance. However, Muang Thai Insurance is 1.0 times less risky than Charan Insurance. It trades about 0.05 of its potential returns per unit of risk. Charan Insurance Public is currently generating about 0.05 per unit of risk. If you would invest 10,996 in Muang Thai Insurance on September 12, 2024 and sell it today you would lose (396.00) from holding Muang Thai Insurance or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muang Thai Insurance vs. Charan Insurance Public
Performance |
| Timeline |
| Muang Thai Insurance |
| Charan Insurance Public |
Muang Thai and Charan Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muang Thai and Charan Insurance
The main advantage of trading using opposite Muang Thai and Charan Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muang Thai position performs unexpectedly, Charan Insurance 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 Charan Insurance will offset losses from the drop in Charan Insurance's long position.| Muang Thai vs. KGI Securities Public | Muang Thai vs. Lalin Property Public | Muang Thai vs. Hwa Fong Rubber | Muang Thai vs. MCS Steel Public |
| Charan Insurance vs. Global Green Chemicals | Charan Insurance vs. Krung Thai Bank | Charan Insurance vs. Muang Thai Insurance | Charan Insurance vs. Indara Insurance 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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