Correlation Between Sakol Energy and IRPC Public
Can any of the company-specific risk be diversified away by investing in both Sakol Energy and IRPC Public 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 Sakol Energy and IRPC Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sakol Energy Public and IRPC Public, you can compare the effects of market volatilities on Sakol Energy and IRPC Public 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 Sakol Energy with a short position of IRPC Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sakol Energy and IRPC Public.
Diversification Opportunities for Sakol Energy and IRPC Public
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sakol and IRPC is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sakol Energy Public and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC Public and Sakol Energy 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 Sakol Energy Public are associated (or correlated) with IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of Sakol Energy i.e., Sakol Energy and IRPC Public go up and down completely randomly.
Pair Corralation between Sakol Energy and IRPC Public
Assuming the 90 days trading horizon Sakol Energy Public is expected to generate 2.71 times more return on investment than IRPC Public. However, Sakol Energy is 2.71 times more volatile than IRPC Public. It trades about -0.1 of its potential returns per unit of risk. IRPC Public is currently generating about -0.3 per unit of risk. If you would invest 32.00 in Sakol Energy Public on September 20, 2024 and sell it today you would lose (2.00) from holding Sakol Energy Public or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sakol Energy Public vs. IRPC Public
Performance |
| Timeline |
| Sakol Energy Public |
| IRPC Public |
Sakol Energy and IRPC Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sakol Energy and IRPC Public
The main advantage of trading using opposite Sakol Energy and IRPC Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sakol Energy position performs unexpectedly, IRPC Public 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 IRPC Public will offset losses from the drop in IRPC Public's long position.| Sakol Energy vs. Bangchak Public | Sakol Energy vs. IRPC Public | Sakol Energy vs. PTT Exploration and | Sakol Energy vs. PTG Energy PCL |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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