Correlation Between IRPC Public and Thai Oil
Can any of the company-specific risk be diversified away by investing in both IRPC Public 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 IRPC Public and Thai Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IRPC Public and Thai Oil Public, you can compare the effects of market volatilities on IRPC Public 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 IRPC Public with a short position of Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRPC Public and Thai Oil.
Diversification Opportunities for IRPC Public and Thai Oil
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IRPC and Thai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding IRPC Public and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil Public and IRPC Public 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 IRPC Public 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 Public has no effect on the direction of IRPC Public i.e., IRPC Public and Thai Oil go up and down completely randomly.
Pair Corralation between IRPC Public and Thai Oil
Assuming the 90 days trading horizon IRPC Public is expected to generate 0.45 times more return on investment than Thai Oil. However, IRPC Public is 2.24 times less risky than Thai Oil. It trades about -0.27 of its potential returns per unit of risk. Thai Oil Public is currently generating about -0.26 per unit of risk. If you would invest 151.00 in IRPC Public on September 3, 2024 and sell it today you would lose (13.00) from holding IRPC Public or give up 8.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IRPC Public vs. Thai Oil Public
Performance |
| Timeline |
| IRPC Public |
| Thai Oil Public |
IRPC Public and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRPC Public and Thai Oil
The main advantage of trading using opposite IRPC Public and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRPC Public 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.| IRPC Public vs. PTT Public | IRPC Public vs. SCB X Public | IRPC Public vs. The Siam Commercial | IRPC Public vs. The Siam Cement |
| Thai Oil vs. PTT Oil and | Thai Oil vs. Thai Oil Public | Thai Oil vs. IRPC Public | Thai Oil vs. Star Petroleum Refining |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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