Correlation Between Ampol and Thai Oil
Can any of the company-specific risk be diversified away by investing in both Ampol and Thai Oil 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 Ampol and Thai Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampol Limited and Thai Oil PCL, you can compare the effects of market volatilities on Ampol and Thai Oil 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 Ampol with a short position of Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampol and Thai Oil.
Diversification Opportunities for Ampol and Thai Oil
Very good diversification
The 3 months correlation between Ampol and Thai is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ampol Limited and Thai Oil PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil PCL and Ampol 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 Ampol Limited are associated (or correlated) with Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil PCL has no effect on the direction of Ampol i.e., Ampol and Thai Oil go up and down completely randomly.
Pair Corralation between Ampol and Thai Oil
Assuming the 90 days horizon Ampol Limited is expected to under-perform the Thai Oil. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ampol Limited is 1.01 times less risky than Thai Oil. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Thai Oil PCL is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,381 in Thai Oil PCL on August 24, 2024 and sell it today you would lose (11.00) from holding Thai Oil PCL or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 53.6% |
| Values | Daily Returns |
Ampol Limited vs. Thai Oil PCL
Performance |
| Timeline |
| Ampol Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Thai Oil PCL |
Ampol and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampol and Thai Oil
The main advantage of trading using opposite Ampol and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampol position performs unexpectedly, Thai Oil 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 Oil will offset losses from the drop in Thai Oil's long position.The idea behind Ampol Limited and Thai Oil 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.| Thai Oil vs. Idemitsu Kosan CoLtd | Thai Oil vs. Eneos Holdings ADR | Thai Oil vs. HF Sinclair Corp | Thai Oil vs. Snowflake |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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