Correlation Between Prime Road and Thai Life
Can any of the company-specific risk be diversified away by investing in both Prime Road 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 Prime Road and Thai Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Road Power and Thai Life Insurance, you can compare the effects of market volatilities on Prime Road 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 Prime Road with a short position of Thai Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Road and Thai Life.
Diversification Opportunities for Prime Road and Thai Life
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prime and Thai is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Prime Road Power 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 Prime Road 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 Prime Road Power 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 Prime Road i.e., Prime Road and Thai Life go up and down completely randomly.
Pair Corralation between Prime Road and Thai Life
Assuming the 90 days trading horizon Prime Road Power is expected to generate 29.39 times more return on investment than Thai Life. However, Prime Road is 29.39 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 62.00 in Prime Road Power on September 14, 2024 and sell it today you would lose (39.00) from holding Prime Road Power or give up 62.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Road Power vs. Thai Life Insurance
Performance |
| Timeline |
| Prime Road Power |
| Thai Life Insurance |
Prime Road and Thai Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Road and Thai Life
The main advantage of trading using opposite Prime Road and Thai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Road 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.| Prime Road vs. BCPG Public | Prime Road vs. Energy Absolute Public | Prime Road vs. Gunkul Engineering Public | Prime Road vs. Gulf Energy Development |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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