Correlation Between Energy Absolute and T S
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and T S 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 T S 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 T S Flour, you can compare the effects of market volatilities on Energy Absolute and T S 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 T S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and T S.
Diversification Opportunities for Energy Absolute and T S
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Energy and TMILL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and T S Flour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T S Flour 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 T S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T S Flour has no effect on the direction of Energy Absolute i.e., Energy Absolute and T S go up and down completely randomly.
Pair Corralation between Energy Absolute and T S
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the T S. But the stock apears to be less risky and, when comparing its historical volatility, Energy Absolute Public is 9.03 times less risky than T S. The stock trades about -0.1 of its potential returns per unit of risk. The T S Flour is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 372.00 in T S Flour on December 4, 2024 and sell it today you would lose (118.00) from holding T S Flour or give up 31.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Energy Absolute Public vs. T S Flour
Performance |
| Timeline |
| Energy Absolute Public |
| T S Flour |
Energy Absolute and T S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and T S
The main advantage of trading using opposite Energy Absolute and T S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, T S 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 T S will offset losses from the drop in T S'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 |
| T S vs. Winner Group Enterprise | T S vs. Union Petrochemical Public | T S vs. Thanapiriya Public | T S vs. TAC Consumer 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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