Correlation Between Thoresen Thai and Thai Reinsurance
Can any of the company-specific risk be diversified away by investing in both Thoresen Thai and Thai Reinsurance 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 Thoresen Thai and Thai Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thoresen Thai Agencies and Thai Reinsurance Public, you can compare the effects of market volatilities on Thoresen Thai and Thai Reinsurance 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 Thoresen Thai with a short position of Thai Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thoresen Thai and Thai Reinsurance.
Diversification Opportunities for Thoresen Thai and Thai Reinsurance
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thoresen and Thai is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Thoresen Thai Agencies and Thai Reinsurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Reinsurance Public and Thoresen Thai 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 Thoresen Thai Agencies are associated (or correlated) with Thai Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Reinsurance Public has no effect on the direction of Thoresen Thai i.e., Thoresen Thai and Thai Reinsurance go up and down completely randomly.
Pair Corralation between Thoresen Thai and Thai Reinsurance
Assuming the 90 days trading horizon Thoresen Thai Agencies is expected to under-perform the Thai Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, Thoresen Thai Agencies is 31.76 times less risky than Thai Reinsurance. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Reinsurance Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Thai Reinsurance Public on September 3, 2024 and sell it today you would lose (23.00) from holding Thai Reinsurance Public or give up 29.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thoresen Thai Agencies vs. Thai Reinsurance Public
Performance |
| Timeline |
| Thoresen Thai Agencies |
| Thai Reinsurance Public |
Thoresen Thai and Thai Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thoresen Thai and Thai Reinsurance
The main advantage of trading using opposite Thoresen Thai and Thai Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thoresen Thai position performs unexpectedly, Thai Reinsurance 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 Thai Reinsurance will offset losses from the drop in Thai Reinsurance's long position.| Thoresen Thai vs. Precious Shipping Public | Thoresen Thai vs. Regional Container Lines | Thoresen Thai vs. PTT Public | Thoresen Thai vs. The Siam Cement |
| Thai Reinsurance vs. Thaire Life Assurance | Thai Reinsurance vs. Hana Microelectronics Public | Thai Reinsurance vs. Ratchthani Leasing Public | Thai Reinsurance vs. Siri Prime Office |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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