Correlation Between Thai Life and I Tail
Can any of the company-specific risk be diversified away by investing in both Thai Life and I Tail 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 I Tail 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 i Tail Corp PCL, you can compare the effects of market volatilities on Thai Life and I Tail 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 I Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and I Tail.
Diversification Opportunities for Thai Life and I Tail
Good diversification
The 3 months correlation between Thai and ITC is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and i Tail Corp PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i Tail Corp 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 I Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i Tail Corp has no effect on the direction of Thai Life i.e., Thai Life and I Tail go up and down completely randomly.
Pair Corralation between Thai Life and I Tail
Assuming the 90 days trading horizon Thai Life Insurance is expected to generate 0.85 times more return on investment than I Tail. However, Thai Life Insurance is 1.17 times less risky than I Tail. It trades about 0.03 of its potential returns per unit of risk. i Tail Corp PCL is currently generating about -0.1 per unit of risk. If you would invest 1,130 in Thai Life Insurance on December 2, 2024 and sell it today you would earn a total of 30.00 from holding Thai Life Insurance or generate 2.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Thai Life Insurance vs. i Tail Corp PCL
Performance |
Timeline |
Thai Life Insurance |
i Tail Corp |
Thai Life and I Tail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thai Life and I Tail
The main advantage of trading using opposite Thai Life and I Tail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, I Tail 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 I Tail will offset losses from the drop in I Tail's long position.The idea behind Thai Life Insurance and i Tail Corp PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.I Tail vs. Thai Union Group | I Tail vs. Osotspa Public | I Tail vs. Asian Alliance International | I Tail vs. AP 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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