Correlation Between Sea Oil and ONE Enterprise
Can any of the company-specific risk be diversified away by investing in both Sea Oil and ONE Enterprise 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 ONE Enterprise 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 The ONE Enterprise, you can compare the effects of market volatilities on Sea Oil and ONE Enterprise 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 ONE Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Oil and ONE Enterprise.
Diversification Opportunities for Sea Oil and ONE Enterprise
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sea and ONE is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sea Oil Public and The ONE Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONE Enterprise 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 ONE Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONE Enterprise has no effect on the direction of Sea Oil i.e., Sea Oil and ONE Enterprise go up and down completely randomly.
Pair Corralation between Sea Oil and ONE Enterprise
Assuming the 90 days trading horizon Sea Oil Public is expected to generate 23.6 times more return on investment than ONE Enterprise. However, Sea Oil is 23.6 times more volatile than The ONE Enterprise. It trades about 0.06 of its potential returns per unit of risk. The ONE Enterprise is currently generating about 0.02 per unit of risk. If you would invest 279.00 in Sea Oil Public on August 25, 2024 and sell it today you would lose (7.00) from holding Sea Oil Public or give up 2.51% 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. The ONE Enterprise
Performance |
| Timeline |
| Sea Oil Public |
| ONE Enterprise |
Sea Oil and ONE Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea Oil and ONE Enterprise
The main advantage of trading using opposite Sea Oil and ONE Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea Oil position performs unexpectedly, ONE Enterprise 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 ONE Enterprise will offset losses from the drop in ONE Enterprise'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 |
| ONE Enterprise vs. Plan B Media | ONE Enterprise vs. Origin Property PCL | ONE Enterprise vs. Gulf Energy Development | ONE Enterprise vs. PTT Oil and |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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