Correlation Between Guangdong Investment and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment 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 Guangdong Investment and Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment Limited and Thoresen Thai Agencies, you can compare the effects of market volatilities on Guangdong Investment 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 Guangdong Investment with a short position of Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Thoresen Thai.
Diversification Opportunities for Guangdong Investment and Thoresen Thai
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and Thoresen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment 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 Guangdong Investment 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 Guangdong Investment 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 Guangdong Investment i.e., Guangdong Investment and Thoresen Thai go up and down completely randomly.
Pair Corralation between Guangdong Investment and Thoresen Thai
Assuming the 90 days horizon Guangdong Investment Limited is expected to under-perform the Thoresen Thai. But the stock apears to be less risky and, when comparing its historical volatility, Guangdong Investment Limited is 1.04 times less risky than Thoresen Thai. The stock trades about -0.15 of its potential returns per unit of risk. The Thoresen Thai Agencies is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Thoresen Thai Agencies on November 3, 2024 and sell it today you would lose (1.00) from holding Thoresen Thai Agencies or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guangdong Investment Limited vs. Thoresen Thai Agencies
Performance |
| Timeline |
| Guangdong Investment |
| Thoresen Thai Agencies |
Guangdong Investment and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and Thoresen Thai
The main advantage of trading using opposite Guangdong Investment and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment 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.| Guangdong Investment vs. United Utilities Group | Guangdong Investment vs. Companhia de Saneamento | Guangdong Investment vs. TTW Public |
| Thoresen Thai vs. United Insurance Holdings | Thoresen Thai vs. X FAB Silicon Foundries | Thoresen Thai vs. INSURANCE AUST GRP | Thoresen Thai vs. Reinsurance Group of |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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