Correlation Between Thai Reinsurance and Amanah Leasing
Can any of the company-specific risk be diversified away by investing in both Thai Reinsurance and Amanah Leasing 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 Amanah Leasing 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 Amanah Leasing Public, you can compare the effects of market volatilities on Thai Reinsurance and Amanah Leasing 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 Amanah Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Reinsurance and Amanah Leasing.
Diversification Opportunities for Thai Reinsurance and Amanah Leasing
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thai and Amanah is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Thai Reinsurance Public and Amanah Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanah Leasing Public 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 Amanah Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanah Leasing Public has no effect on the direction of Thai Reinsurance i.e., Thai Reinsurance and Amanah Leasing go up and down completely randomly.
Pair Corralation between Thai Reinsurance and Amanah Leasing
Assuming the 90 days trading horizon Thai Reinsurance Public is expected to generate 0.63 times more return on investment than Amanah Leasing. However, Thai Reinsurance Public is 1.58 times less risky than Amanah Leasing. It trades about -0.39 of its potential returns per unit of risk. Amanah Leasing Public is currently generating about -0.42 per unit of risk. If you would invest 63.00 in Thai Reinsurance Public on August 27, 2024 and sell it today you would lose (7.00) from holding Thai Reinsurance Public or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Reinsurance Public vs. Amanah Leasing Public
Performance |
| Timeline |
| Thai Reinsurance Public |
| Amanah Leasing Public |
Thai Reinsurance and Amanah Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Reinsurance and Amanah Leasing
The main advantage of trading using opposite Thai Reinsurance and Amanah Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Reinsurance position performs unexpectedly, Amanah Leasing 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 Amanah Leasing will offset losses from the drop in Amanah Leasing'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 |
| Amanah Leasing vs. Thai Energy Storage | Amanah Leasing vs. Royal Orchid Hotel | Amanah Leasing vs. Grand Canal Land | Amanah Leasing vs. PRG 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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