Correlation Between Thai Reinsurance and Indara Insurance
Can any of the company-specific risk be diversified away by investing in both Thai Reinsurance and Indara Insurance 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 Indara Insurance 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 Indara Insurance Public, you can compare the effects of market volatilities on Thai Reinsurance and Indara Insurance 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 Indara Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Reinsurance and Indara Insurance.
Diversification Opportunities for Thai Reinsurance and Indara Insurance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thai and Indara is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Thai Reinsurance Public and Indara Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indara Insurance 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 Indara Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indara Insurance Public has no effect on the direction of Thai Reinsurance i.e., Thai Reinsurance and Indara Insurance go up and down completely randomly.
Pair Corralation between Thai Reinsurance and Indara Insurance
Assuming the 90 days trading horizon Thai Reinsurance Public is expected to under-perform the Indara Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Thai Reinsurance Public is 2.45 times less risky than Indara Insurance. The stock trades about -0.39 of its potential returns per unit of risk. The Indara Insurance Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,175 in Indara Insurance Public on August 27, 2024 and sell it today you would earn a total of 25.00 from holding Indara Insurance Public or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Reinsurance Public vs. Indara Insurance Public
Performance |
| Timeline |
| Thai Reinsurance Public |
| Indara Insurance Public |
Thai Reinsurance and Indara Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Reinsurance and Indara Insurance
The main advantage of trading using opposite Thai Reinsurance and Indara Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Reinsurance position performs unexpectedly, Indara Insurance 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 Indara Insurance will offset losses from the drop in Indara Insurance'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 |
| Indara Insurance vs. IFS Capital Public | Indara Insurance vs. Internet Thailand Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. Haad Thip 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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