Correlation Between Thai Life and JCK Hospitality
Can any of the company-specific risk be diversified away by investing in both Thai Life and JCK Hospitality 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 JCK Hospitality 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 JCK Hospitality Public, you can compare the effects of market volatilities on Thai Life and JCK Hospitality 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 JCK Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and JCK Hospitality.
Diversification Opportunities for Thai Life and JCK Hospitality
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thai and JCK is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and JCK Hospitality Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCK Hospitality 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 JCK Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCK Hospitality Public has no effect on the direction of Thai Life i.e., Thai Life and JCK Hospitality go up and down completely randomly.
Pair Corralation between Thai Life and JCK Hospitality
Assuming the 90 days trading horizon Thai Life Insurance is expected to under-perform the JCK Hospitality. But the stock apears to be less risky and, when comparing its historical volatility, Thai Life Insurance is 11.52 times less risky than JCK Hospitality. The stock trades about -0.09 of its potential returns per unit of risk. The JCK Hospitality Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.00 in JCK Hospitality Public on September 2, 2024 and sell it today you would lose (1.00) from holding JCK Hospitality Public or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Life Insurance vs. JCK Hospitality Public
Performance |
| Timeline |
| Thai Life Insurance |
| JCK Hospitality Public |
Thai Life and JCK Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Life and JCK Hospitality
The main advantage of trading using opposite Thai Life and JCK Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, JCK Hospitality 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 JCK Hospitality will offset losses from the drop in JCK Hospitality'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 |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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