Correlation Between Star Petroleum and Ratch Group
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Ratch Group 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 Ratch Group 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 Ratch Group Public, you can compare the effects of market volatilities on Star Petroleum and Ratch Group 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 Ratch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Ratch Group.
Diversification Opportunities for Star Petroleum and Ratch Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Star and Ratch is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Ratch Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratch Group 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 Ratch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratch Group Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and Ratch Group go up and down completely randomly.
Pair Corralation between Star Petroleum and Ratch Group
Assuming the 90 days trading horizon Star Petroleum Refining is expected to generate 1.39 times more return on investment than Ratch Group. However, Star Petroleum is 1.39 times more volatile than Ratch Group Public. It trades about 0.1 of its potential returns per unit of risk. Ratch Group Public is currently generating about -0.01 per unit of risk. If you would invest 655.00 in Star Petroleum Refining on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Star Petroleum Refining or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. Ratch Group Public
Performance |
| Timeline |
| Star Petroleum Refining |
| Ratch Group Public |
Star Petroleum and Ratch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Ratch Group
The main advantage of trading using opposite Star Petroleum and Ratch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Ratch Group 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 Ratch Group will offset losses from the drop in Ratch Group'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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