Correlation Between Precious Shipping and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Precious Shipping 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 Precious Shipping and Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Shipping Public and Thoresen Thai Agencies, you can compare the effects of market volatilities on Precious Shipping 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 Precious Shipping with a short position of Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Shipping and Thoresen Thai.
Diversification Opportunities for Precious Shipping and Thoresen Thai
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Precious and Thoresen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Precious Shipping Public 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 Precious Shipping 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 Precious Shipping Public 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 Precious Shipping i.e., Precious Shipping and Thoresen Thai go up and down completely randomly.
Pair Corralation between Precious Shipping and Thoresen Thai
Assuming the 90 days trading horizon Precious Shipping Public is expected to under-perform the Thoresen Thai. But the stock apears to be less risky and, when comparing its historical volatility, Precious Shipping Public is 1.7 times less risky than Thoresen Thai. The stock trades about -0.07 of its potential returns per unit of risk. The Thoresen Thai Agencies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 545.00 in Thoresen Thai Agencies on August 24, 2024 and sell it today you would earn a total of 20.00 from holding Thoresen Thai Agencies or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precious Shipping Public vs. Thoresen Thai Agencies
Performance |
| Timeline |
| Precious Shipping Public |
| Thoresen Thai Agencies |
Precious Shipping and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precious Shipping and Thoresen Thai
The main advantage of trading using opposite Precious Shipping and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Shipping 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.| Precious Shipping vs. Tata Steel Public | Precious Shipping vs. Thaifoods Group Public | Precious Shipping vs. TMT Steel Public | Precious Shipping vs. The Erawan Group |
| Thoresen Thai vs. Precious Shipping Public | Thoresen Thai vs. Regional Container Lines | Thoresen Thai vs. PTT Public | Thoresen Thai vs. The Siam Cement |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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