Correlation Between Thai Reinsurance and Chumporn Palm
Can any of the company-specific risk be diversified away by investing in both Thai Reinsurance and Chumporn Palm 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 Chumporn Palm 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 Chumporn Palm Oil, you can compare the effects of market volatilities on Thai Reinsurance and Chumporn Palm 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 Chumporn Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Reinsurance and Chumporn Palm.
Diversification Opportunities for Thai Reinsurance and Chumporn Palm
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and Chumporn is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Thai Reinsurance Public and Chumporn Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chumporn Palm Oil 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 Chumporn Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chumporn Palm Oil has no effect on the direction of Thai Reinsurance i.e., Thai Reinsurance and Chumporn Palm go up and down completely randomly.
Pair Corralation between Thai Reinsurance and Chumporn Palm
Assuming the 90 days trading horizon Thai Reinsurance is expected to generate 1.05 times less return on investment than Chumporn Palm. In addition to that, Thai Reinsurance is 1.0 times more volatile than Chumporn Palm Oil. It trades about 0.05 of its total potential returns per unit of risk. Chumporn Palm Oil is currently generating about 0.05 per unit of volatility. If you would invest 268.00 in Chumporn Palm Oil on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Chumporn Palm Oil or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Reinsurance Public vs. Chumporn Palm Oil
Performance |
| Timeline |
| Thai Reinsurance Public |
| Chumporn Palm Oil |
Thai Reinsurance and Chumporn Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Reinsurance and Chumporn Palm
The main advantage of trading using opposite Thai Reinsurance and Chumporn Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Reinsurance position performs unexpectedly, Chumporn Palm 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 Chumporn Palm will offset losses from the drop in Chumporn Palm's long position.| Thai Reinsurance vs. Thaire Life Assurance | Thai Reinsurance vs. Hana Microelectronics Public | Thai Reinsurance vs. Ratchthani Leasing Public | Thai Reinsurance vs. Siri Prime Office |
| Chumporn Palm vs. Univanich Palm Oil | Chumporn Palm vs. Chiangmai Frozen Foods | Chumporn Palm vs. Dynasty Ceramic Public | Chumporn Palm vs. GFPT 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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