Correlation Between Thai Life and PTT Oil
Can any of the company-specific risk be diversified away by investing in both Thai Life and PTT Oil 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 PTT Oil 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 PTT Oil and, you can compare the effects of market volatilities on Thai Life and PTT Oil 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 PTT Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and PTT Oil.
Diversification Opportunities for Thai Life and PTT Oil
Good diversification
The 3 months correlation between Thai and PTT is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and PTT Oil and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Oil 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 PTT Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Oil has no effect on the direction of Thai Life i.e., Thai Life and PTT Oil go up and down completely randomly.
Pair Corralation between Thai Life and PTT Oil
Assuming the 90 days trading horizon Thai Life Insurance is expected to generate 1.43 times more return on investment than PTT Oil. However, Thai Life is 1.43 times more volatile than PTT Oil and. It trades about 0.05 of its potential returns per unit of risk. PTT Oil and is currently generating about -0.27 per unit of risk. If you would invest 1,020 in Thai Life Insurance on September 3, 2024 and sell it today you would earn a total of 40.00 from holding Thai Life Insurance or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Life Insurance vs. PTT Oil and
Performance |
| Timeline |
| Thai Life Insurance |
| PTT Oil |
Thai Life and PTT Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Life and PTT Oil
The main advantage of trading using opposite Thai Life and PTT Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, PTT Oil 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 PTT Oil will offset losses from the drop in PTT Oil'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 |
| PTT Oil vs. PTT Public | PTT Oil vs. CP ALL Public | PTT Oil vs. Kasikornbank Public | PTT Oil vs. Airports of Thailand |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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