Correlation Between Thai Film and Thai Reinsurance
Can any of the company-specific risk be diversified away by investing in both Thai Film 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 Thai Film and Thai Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Film Industries and Thai Reinsurance Public, you can compare the effects of market volatilities on Thai Film 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 Thai Film with a short position of Thai Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Film and Thai Reinsurance.
Diversification Opportunities for Thai Film and Thai Reinsurance
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thai and Thai is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Thai Film Industries 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 Thai Film 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 Thai Film Industries 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 Thai Film i.e., Thai Film and Thai Reinsurance go up and down completely randomly.
Pair Corralation between Thai Film and Thai Reinsurance
Assuming the 90 days trading horizon Thai Film Industries is expected to generate 6.64 times more return on investment than Thai Reinsurance. However, Thai Film is 6.64 times more volatile than Thai Reinsurance Public. It trades about 0.11 of its potential returns per unit of risk. Thai Reinsurance Public is currently generating about -0.24 per unit of risk. If you would invest 7.00 in Thai Film Industries on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Thai Film Industries or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Film Industries vs. Thai Reinsurance Public
Performance |
| Timeline |
| Thai Film Industries |
| Thai Reinsurance Public |
Thai Film and Thai Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Film and Thai Reinsurance
The main advantage of trading using opposite Thai Film and Thai Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Film 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.| Thai Film vs. Thai Reinsurance Public | Thai Film vs. STPI Public | Thai Film vs. Siri Prime Office | Thai Film vs. Thoresen Thai Agencies |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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