Correlation Between Thai Life and NAT ABSOLUTE
Can any of the company-specific risk be diversified away by investing in both Thai Life and NAT ABSOLUTE 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 NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES, you can compare the effects of market volatilities on Thai Life and NAT ABSOLUTE 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 NAT ABSOLUTE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and NAT ABSOLUTE.
Diversification Opportunities for Thai Life and NAT ABSOLUTE
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and NAT is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and NAT ABSOLUTE TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAT ABSOLUTE TECHNOLOGIES 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 NAT ABSOLUTE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAT ABSOLUTE TECHNOLOGIES has no effect on the direction of Thai Life i.e., Thai Life and NAT ABSOLUTE go up and down completely randomly.
Pair Corralation between Thai Life and NAT ABSOLUTE
Assuming the 90 days trading horizon Thai Life Insurance is expected to generate 2.59 times more return on investment than NAT ABSOLUTE. However, Thai Life is 2.59 times more volatile than NAT ABSOLUTE TECHNOLOGIES. It trades about -0.02 of its potential returns per unit of risk. NAT ABSOLUTE TECHNOLOGIES is currently generating about -0.46 per unit of risk. If you would invest 1,100 in Thai Life Insurance on August 28, 2024 and sell it today you would lose (20.00) from holding Thai Life Insurance or give up 1.82% 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. NAT ABSOLUTE TECHNOLOGIES
Performance |
| Timeline |
| Thai Life Insurance |
| NAT ABSOLUTE TECHNOLOGIES |
Thai Life and NAT ABSOLUTE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Life and NAT ABSOLUTE
The main advantage of trading using opposite Thai Life and NAT ABSOLUTE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, NAT ABSOLUTE 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 NAT ABSOLUTE will offset losses from the drop in NAT ABSOLUTE'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 |
| NAT ABSOLUTE vs. Halcyon Technology Public | NAT ABSOLUTE vs. Kasikornbank Public | NAT ABSOLUTE vs. Information and Communication | NAT ABSOLUTE vs. Kiatnakin Phatra Bank |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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