Correlation Between Sea Oil and Krung Thai
Can any of the company-specific risk be diversified away by investing in both Sea Oil and Krung 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 Sea Oil and Krung Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea Oil Public and Krung Thai Bank, you can compare the effects of market volatilities on Sea Oil and Krung 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 Sea Oil with a short position of Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Oil and Krung Thai.
Diversification Opportunities for Sea Oil and Krung Thai
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sea and Krung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sea Oil Public and Krung Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krung Thai Bank and Sea 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 Sea Oil Public are associated (or correlated) with Krung Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krung Thai Bank has no effect on the direction of Sea Oil i.e., Sea Oil and Krung Thai go up and down completely randomly.
Pair Corralation between Sea Oil and Krung Thai
Assuming the 90 days trading horizon Sea Oil Public is expected to generate 39.97 times more return on investment than Krung Thai. However, Sea Oil is 39.97 times more volatile than Krung Thai Bank. It trades about 0.05 of its potential returns per unit of risk. Krung Thai Bank is currently generating about 0.03 per unit of risk. If you would invest 303.00 in Sea Oil Public on August 26, 2024 and sell it today you would lose (31.00) from holding Sea Oil Public or give up 10.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea Oil Public vs. Krung Thai Bank
Performance |
| Timeline |
| Sea Oil Public |
| Krung Thai Bank |
Sea Oil and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea Oil and Krung Thai
The main advantage of trading using opposite Sea Oil and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea Oil position performs unexpectedly, Krung 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 Krung Thai will offset losses from the drop in Krung Thai's long position.| Sea Oil vs. Krung Thai Bank | Sea Oil vs. Thai Union Group | Sea Oil vs. PTT Public | Sea Oil vs. PTT Exploration and |
| Krung Thai vs. Supalai Public | Krung Thai vs. Thai Oil Public | Krung Thai vs. The Erawan Group | Krung Thai vs. Ditto Public |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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