Correlation Between Indara Insurance and Thai Credit

Can any of the company-specific risk be diversified away by investing in both Indara Insurance and Thai Credit 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 Indara Insurance and Thai Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indara Insurance Public and Thai Credit Pcl, you can compare the effects of market volatilities on Indara Insurance and Thai Credit 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 Indara Insurance with a short position of Thai Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indara Insurance and Thai Credit.

Diversification Opportunities for Indara Insurance and Thai Credit

0.0

Correlation Coefficient

Indara Insurance  Thai Credit

Pay attention - limited upside

The 3 months correlation between Indara and Thai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indara Insurance Public and Thai Credit Pcl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Credit Pcl and Indara Insurance 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 Indara Insurance Public are associated (or correlated) with Thai Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Credit Pcl has no effect on the direction of Indara Insurance i.e., Indara Insurance and Thai Credit go up and down completely randomly.

Pair Corralation between Indara Insurance and Thai Credit

Assuming the 90 days trading horizon Indara Insurance Public is expected to under-perform the Thai Credit. But the stock apears to be less risky and, when comparing its historical volatility, Indara Insurance Public is 1.09 times less risky than Thai Credit. The stock trades about -0.05 of its potential returns per unit of risk. The Thai Credit Pcl is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  2,030  in Thai Credit Pcl on September 17, 2024 and sell it today you would lose (220.00) from holding Thai Credit Pcl or give up 10.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Indara Insurance Public  vs.  Thai Credit Pcl

Indara Insurance Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indara Insurance Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Thai Credit Pcl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Credit Pcl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Indara Insurance and Thai Credit

The main advantage of trading using opposite Indara Insurance and Thai Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indara Insurance position performs unexpectedly, Thai Credit 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 Credit will offset losses from the drop in Thai Credit's long position.

The idea behind Indara Insurance Public and Thai Credit 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.