Correlation Between Thai Life and ALL ENERGY
Can any of the company-specific risk be diversified away by investing in both Thai Life and ALL 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 Life and ALL ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Life Insurance and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on Thai Life and ALL 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 Life with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and ALL ENERGY.
Diversification Opportunities for Thai Life and ALL ENERGY
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thai and ALL is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and Thai Life 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 Life Insurance are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of Thai Life i.e., Thai Life and ALL ENERGY go up and down completely randomly.
Pair Corralation between Thai Life and ALL ENERGY
Assuming the 90 days trading horizon Thai Life Insurance is expected to generate 0.5 times more return on investment than ALL ENERGY. However, Thai Life Insurance is 2.01 times less risky than ALL ENERGY. It trades about 0.23 of its potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about 0.06 per unit of risk. If you would invest 755.00 in Thai Life Insurance on September 2, 2024 and sell it today you would earn a total of 305.00 from holding Thai Life Insurance or generate 40.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Life Insurance vs. ALL ENERGY UTILITIES
Performance |
| Timeline |
| Thai Life Insurance |
| ALL ENERGY UTILITIES |
Thai Life and ALL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Life and ALL ENERGY
The main advantage of trading using opposite Thai Life and ALL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, ALL 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 ALL ENERGY will offset losses from the drop in ALL ENERGY's long position.| Thai Life vs. PTT Oil and | Thai Life vs. Home Product Center | Thai Life vs. Muangthai Capital Public | Thai Life vs. The Erawan Group |
| ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY vs. Lohakit Metal 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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