Correlation Between Thai Oil and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Thai Oil and Superior Plus 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 Thai Oil and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Oil Public and Superior Plus Corp, you can compare the effects of market volatilities on Thai Oil and Superior Plus 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 Thai Oil with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Oil and Superior Plus.
Diversification Opportunities for Thai Oil and Superior Plus
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thai and Superior is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Thai Oil 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 Thai Oil Public are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Thai Oil i.e., Thai Oil and Superior Plus go up and down completely randomly.
Pair Corralation between Thai Oil and Superior Plus
Assuming the 90 days horizon Thai Oil Public is expected to generate 2.68 times more return on investment than Superior Plus. However, Thai Oil is 2.68 times more volatile than Superior Plus Corp. It trades about 0.05 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.02 per unit of risk. If you would invest 60.00 in Thai Oil Public on September 12, 2024 and sell it today you would earn a total of 45.00 from holding Thai Oil Public or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Thai Oil Public vs. Superior Plus Corp
Performance |
| Timeline |
| Thai Oil Public |
| Superior Plus Corp |
Thai Oil and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Oil and Superior Plus
The main advantage of trading using opposite Thai Oil and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Oil position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Thai Oil vs. Superior Plus Corp | Thai Oil vs. SIVERS SEMICONDUCTORS AB | Thai Oil vs. Norsk Hydro ASA | Thai Oil vs. Reliance Steel Aluminum |
| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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