Correlation Between Ratch Group and Thai Oil
Can any of the company-specific risk be diversified away by investing in both Ratch Group 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 Ratch Group and Thai Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratch Group Public and Thai Oil Public, you can compare the effects of market volatilities on Ratch Group 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 Ratch Group with a short position of Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratch Group and Thai Oil.
Diversification Opportunities for Ratch Group and Thai Oil
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ratch and Thai is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ratch Group 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 Ratch Group 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 Ratch Group 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 Ratch Group i.e., Ratch Group and Thai Oil go up and down completely randomly.
Pair Corralation between Ratch Group and Thai Oil
Assuming the 90 days trading horizon Ratch Group Public is expected to generate 0.97 times more return on investment than Thai Oil. However, Ratch Group Public is 1.03 times less risky than Thai Oil. It trades about -0.01 of its potential returns per unit of risk. Thai Oil Public is currently generating about -0.37 per unit of risk. If you would invest 3,200 in Ratch Group Public on September 4, 2024 and sell it today you would lose (25.00) from holding Ratch Group Public or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ratch Group Public vs. Thai Oil Public
Performance |
| Timeline |
| Ratch Group Public |
| Thai Oil Public |
Ratch Group and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ratch Group and Thai Oil
The main advantage of trading using opposite Ratch Group and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratch Group 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.| Ratch Group vs. Electricity Generating Public | Ratch Group vs. PTT Public | Ratch Group vs. Advanced Info Service | Ratch Group vs. The Siam Cement |
| Thai Oil vs. PTT Public | Thai Oil vs. SCB X Public | Thai Oil vs. The Siam Commercial | Thai Oil 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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