Correlation Between Thai Reinsurance and Thai Energy
Can any of the company-specific risk be diversified away by investing in both Thai Reinsurance and Thai Energy 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 Reinsurance and Thai Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Reinsurance Public and Thai Energy Storage, you can compare the effects of market volatilities on Thai Reinsurance and Thai Energy 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 Reinsurance with a short position of Thai Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Reinsurance and Thai Energy.
Diversification Opportunities for Thai Reinsurance and Thai Energy
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 Reinsurance Public and Thai Energy Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Energy Storage and Thai Reinsurance 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 Reinsurance Public are associated (or correlated) with Thai Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Energy Storage has no effect on the direction of Thai Reinsurance i.e., Thai Reinsurance and Thai Energy go up and down completely randomly.
Pair Corralation between Thai Reinsurance and Thai Energy
Assuming the 90 days trading horizon Thai Reinsurance is expected to generate 1.09 times less return on investment than Thai Energy. But when comparing it to its historical volatility, Thai Reinsurance Public is 1.0 times less risky than Thai Energy. It trades about 0.06 of its potential returns per unit of risk. Thai Energy Storage is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,454 in Thai Energy Storage on August 29, 2024 and sell it today you would earn a total of 921.00 from holding Thai Energy Storage or generate 20.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Reinsurance Public vs. Thai Energy Storage
Performance |
| Timeline |
| Thai Reinsurance Public |
| Thai Energy Storage |
Thai Reinsurance and Thai Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Reinsurance and Thai Energy
The main advantage of trading using opposite Thai Reinsurance and Thai Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Reinsurance position performs unexpectedly, Thai Energy 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 Energy will offset losses from the drop in Thai Energy's long position.| Thai Reinsurance vs. Thai Energy Storage | Thai Reinsurance vs. Royal Orchid Hotel | Thai Reinsurance vs. Grand Canal Land | Thai Reinsurance vs. PRG Public |
| Thai Energy vs. AJ Advance Technology | Thai Energy vs. Asia Precision Public | Thai Energy vs. Asia Metal Public | Thai Energy vs. The Erawan Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |