Correlation Between CITIC and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both CITIC and Thoresen Thai 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 CITIC and Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Limited and Thoresen Thai Agencies, you can compare the effects of market volatilities on CITIC and Thoresen Thai 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 CITIC with a short position of Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC and Thoresen Thai.
Diversification Opportunities for CITIC and Thoresen Thai
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CITIC and Thoresen is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Limited and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies and CITIC 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 CITIC Limited are associated (or correlated) with Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of CITIC i.e., CITIC and Thoresen Thai go up and down completely randomly.
Pair Corralation between CITIC and Thoresen Thai
Assuming the 90 days horizon CITIC Limited is expected to under-perform the Thoresen Thai. But the stock apears to be less risky and, when comparing its historical volatility, CITIC Limited is 1.66 times less risky than Thoresen Thai. The stock trades about -0.01 of its potential returns per unit of risk. The Thoresen Thai Agencies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Thoresen Thai Agencies on September 19, 2024 and sell it today you would earn a total of 0.00 from holding Thoresen Thai Agencies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Limited vs. Thoresen Thai Agencies
Performance |
| Timeline |
| CITIC Limited |
| Thoresen Thai Agencies |
CITIC and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC and Thoresen Thai
The main advantage of trading using opposite CITIC and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC position performs unexpectedly, Thoresen Thai 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 Thoresen Thai will offset losses from the drop in Thoresen Thai's long position.The idea behind CITIC Limited and Thoresen Thai Agencies 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.| Thoresen Thai vs. THAI BEVERAGE | Thoresen Thai vs. PARKEN Sport Entertainment | Thoresen Thai vs. PT Global Mediacom | Thoresen Thai vs. LG Display Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |