Correlation Between Star Petroleum and Bangchak Public
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Bangchak 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 Star Petroleum and Bangchak Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Petroleum Refining and Bangchak Public, you can compare the effects of market volatilities on Star Petroleum and Bangchak 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 Star Petroleum with a short position of Bangchak Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Bangchak Public.
Diversification Opportunities for Star Petroleum and Bangchak Public
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Star and Bangchak is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Bangchak Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangchak Public and Star Petroleum 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 Star Petroleum Refining are associated (or correlated) with Bangchak Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangchak Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and Bangchak Public go up and down completely randomly.
Pair Corralation between Star Petroleum and Bangchak Public
Assuming the 90 days trading horizon Star Petroleum Refining is expected to generate 0.87 times more return on investment than Bangchak Public. However, Star Petroleum Refining is 1.14 times less risky than Bangchak Public. It trades about 0.02 of its potential returns per unit of risk. Bangchak Public is currently generating about -0.07 per unit of risk. If you would invest 665.00 in Star Petroleum Refining on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Star Petroleum Refining or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. Bangchak Public
Performance |
| Timeline |
| Star Petroleum Refining |
| Bangchak Public |
Star Petroleum and Bangchak Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Bangchak Public
The main advantage of trading using opposite Star Petroleum and Bangchak Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Bangchak 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 Bangchak Public will offset losses from the drop in Bangchak Public's long position.| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
| Bangchak Public vs. Thai Oil Public | Bangchak Public vs. PTT Public | Bangchak Public vs. PTT Global Chemical | Bangchak Public vs. IRPC 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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