Correlation Between Thai Life and NForce Secure
Can any of the company-specific risk be diversified away by investing in both Thai Life and NForce Secure 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 NForce Secure 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 nForce Secure Public, you can compare the effects of market volatilities on Thai Life and NForce Secure 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 NForce Secure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Life and NForce Secure.
Diversification Opportunities for Thai Life and NForce Secure
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thai and NForce is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Thai Life Insurance and nForce Secure Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nForce Secure Public 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 NForce Secure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nForce Secure Public has no effect on the direction of Thai Life i.e., Thai Life and NForce Secure go up and down completely randomly.
Pair Corralation between Thai Life and NForce Secure
Assuming the 90 days trading horizon Thai Life Insurance is expected to under-perform the NForce Secure. In addition to that, Thai Life is 1.45 times more volatile than nForce Secure Public. It trades about -0.05 of its total potential returns per unit of risk. nForce Secure Public is currently generating about -0.05 per unit of volatility. If you would invest 1,250 in nForce Secure Public on September 26, 2024 and sell it today you would lose (20.00) from holding nForce Secure Public or give up 1.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Thai Life Insurance vs. nForce Secure Public
Performance |
Timeline |
Thai Life Insurance |
nForce Secure Public |
Thai Life and NForce Secure Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thai Life and NForce Secure
The main advantage of trading using opposite Thai Life and NForce Secure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Life position performs unexpectedly, NForce Secure 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 NForce Secure will offset losses from the drop in NForce Secure's long position.Thai Life vs. Bangkok Life Assurance | Thai Life vs. PTT Oil and | Thai Life vs. Home Product Center | Thai Life vs. The Erawan Group |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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