Correlation Between Thai Life and AIM Industrial
Can any of the company-specific risk be diversified away by investing in both Thai Life and AIM Industrial 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 AIM Industrial 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 AIM Industrial Growth, you can compare the effects of market volatilities on Thai Life and AIM Industrial 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 AIM Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and AIM Industrial.
Diversification Opportunities for Thai Life and AIM Industrial
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and AIM is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and AIM Industrial Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM Industrial Growth 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 AIM Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM Industrial Growth has no effect on the direction of Thai Life i.e., Thai Life and AIM Industrial go up and down completely randomly.
Pair Corralation between Thai Life and AIM Industrial
Assuming the 90 days trading horizon Thai Life Insurance is expected to generate 2.23 times more return on investment than AIM Industrial. However, Thai Life is 2.23 times more volatile than AIM Industrial Growth. It trades about 0.03 of its potential returns per unit of risk. AIM Industrial Growth is currently generating about 0.02 per unit of risk. If you would invest 995.00 in Thai Life Insurance on September 14, 2024 and sell it today you would earn a total of 85.00 from holding Thai Life Insurance or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Life Insurance vs. AIM Industrial Growth
Performance |
| Timeline |
| Thai Life Insurance |
| AIM Industrial Growth |
Thai Life and AIM Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Life and AIM Industrial
The main advantage of trading using opposite Thai Life and AIM Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, AIM Industrial 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 AIM Industrial will offset losses from the drop in AIM Industrial's long position.| Thai Life vs. Bangkok Life Assurance | Thai Life vs. PTT Oil and | Thai Life vs. Home Product Center | Thai Life vs. Muangthai Capital Public |
| AIM Industrial vs. Amata Summit Growth | AIM Industrial vs. WHA Premium Growth | AIM Industrial vs. Digital Telecommunications Infrastructure | AIM Industrial vs. Quality Houses Property |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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