Correlation Between Oracle and Thaifoods Group

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Can any of the company-specific risk be diversified away by investing in both Oracle and Thaifoods Group 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 Oracle and Thaifoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oracle and Thaifoods Group Public, you can compare the effects of market volatilities on Oracle and Thaifoods Group 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 Oracle with a short position of Thaifoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oracle and Thaifoods Group.

Diversification Opportunities for Oracle and Thaifoods Group

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Oracle and Thaifoods is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Oracle and Thaifoods Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaifoods Group Public and Oracle 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 Oracle are associated (or correlated) with Thaifoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaifoods Group Public has no effect on the direction of Oracle i.e., Oracle and Thaifoods Group go up and down completely randomly.

Pair Corralation between Oracle and Thaifoods Group

Given the investment horizon of 90 days Oracle is expected to generate 0.94 times more return on investment than Thaifoods Group. However, Oracle is 1.06 times less risky than Thaifoods Group. It trades about 0.23 of its potential returns per unit of risk. Thaifoods Group Public is currently generating about -0.22 per unit of risk. If you would invest  16,959  in Oracle on September 3, 2024 and sell it today you would earn a total of  1,525  from holding Oracle or generate 8.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Oracle  vs.  Thaifoods Group Public

 Performance 
       Timeline  
Oracle 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal fundamental indicators, Oracle disclosed solid returns over the last few months and may actually be approaching a breakup point.
Thaifoods Group Public 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Thaifoods Group Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Thaifoods Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Oracle and Thaifoods Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oracle and Thaifoods Group

The main advantage of trading using opposite Oracle and Thaifoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle position performs unexpectedly, Thaifoods Group 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 Thaifoods Group will offset losses from the drop in Thaifoods Group's long position.
The idea behind Oracle and Thaifoods Group Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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