Correlation Between Thai Life and Indara Insurance
Can any of the company-specific risk be diversified away by investing in both Thai Life 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 Life 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 Life Insurance and Indara Insurance Public, you can compare the effects of market volatilities on Thai Life 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 Life with a short position of Indara Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and Indara Insurance.
Diversification Opportunities for Thai Life and Indara Insurance
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and Indara is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance 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 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 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 Life i.e., Thai Life and Indara Insurance go up and down completely randomly.
Pair Corralation between Thai Life and Indara Insurance
Assuming the 90 days trading horizon Thai Life is expected to generate 61.67 times less return on investment than Indara Insurance. But when comparing it to its historical volatility, Thai Life Insurance is 29.32 times less risky than Indara Insurance. It trades about 0.03 of its potential returns per unit of risk. Indara Insurance Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,500 in Indara Insurance Public on September 14, 2024 and sell it today you would lose (3,600) from holding Indara Insurance Public or give up 31.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Life Insurance vs. Indara Insurance Public
Performance |
| Timeline |
| Thai Life Insurance |
| Indara Insurance Public |
Thai Life and Indara Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Life and Indara Insurance
The main advantage of trading using opposite Thai Life and Indara Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life 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 Life vs. Bangkok Life Assurance | Thai Life vs. PTT Oil and | Thai Life vs. Home Product Center | Thai Life vs. Muangthai Capital Public |
| Indara Insurance vs. KGI Securities Public | Indara Insurance vs. Lalin Property Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. MCS Steel 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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