Correlation Between Energy Absolute and RS Public
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and RS Public 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 Energy Absolute and RS Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and RS Public, you can compare the effects of market volatilities on Energy Absolute and RS Public 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 Energy Absolute with a short position of RS Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and RS Public.
Diversification Opportunities for Energy Absolute and RS Public
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Energy and RS-R is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and RS Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS Public and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with RS Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Public has no effect on the direction of Energy Absolute i.e., Energy Absolute and RS Public go up and down completely randomly.
Pair Corralation between Energy Absolute and RS Public
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the RS Public. But the stock apears to be less risky and, when comparing its historical volatility, Energy Absolute Public is 13.53 times less risky than RS Public. The stock trades about -0.09 of its potential returns per unit of risk. The RS Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,601 in RS Public on September 2, 2024 and sell it today you would lose (1,031) from holding RS Public or give up 64.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Energy Absolute Public vs. RS Public
Performance |
| Timeline |
| Energy Absolute Public |
| RS Public |
Energy Absolute and RS Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and RS Public
The main advantage of trading using opposite Energy Absolute and RS Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, RS Public 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 RS Public will offset losses from the drop in RS Public's long position.| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
| RS Public vs. Major Cineplex Group | RS Public vs. The Erawan Group | RS Public vs. Autocorp Holding Public | RS Public vs. XSpring Capital 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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