Correlation Between Thai Life and Navakij Insurance
Can any of the company-specific risk be diversified away by investing in both Thai Life and Navakij 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 Navakij 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 The Navakij Insurance, you can compare the effects of market volatilities on Thai Life and Navakij 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 Navakij Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and Navakij Insurance.
Diversification Opportunities for Thai Life and Navakij Insurance
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Navakij is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and The Navakij Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navakij Insurance 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 Navakij Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navakij Insurance has no effect on the direction of Thai Life i.e., Thai Life and Navakij Insurance go up and down completely randomly.
Pair Corralation between Thai Life and Navakij Insurance
Assuming the 90 days trading horizon Thai Life is expected to generate 63.93 times less return on investment than Navakij Insurance. But when comparing it to its historical volatility, Thai Life Insurance is 29.29 times less risky than Navakij Insurance. It trades about 0.03 of its potential returns per unit of risk. The Navakij Insurance is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,650 in The Navakij Insurance on September 14, 2024 and sell it today you would lose (160.00) from holding The Navakij Insurance or give up 6.04% 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. The Navakij Insurance
Performance |
| Timeline |
| Thai Life Insurance |
| Navakij Insurance |
Thai Life and Navakij Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Life and Navakij Insurance
The main advantage of trading using opposite Thai Life and Navakij Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, Navakij 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 Navakij Insurance will offset losses from the drop in Navakij 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 |
| Navakij Insurance vs. Ocean Glass Public | Navakij Insurance vs. Pan Asia Footwear | Navakij Insurance vs. Nonthavej Hospital Public | Navakij Insurance vs. Newcity 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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