Correlation Between Thai Oil and Zhihu
Can any of the company-specific risk be diversified away by investing in both Thai Oil and Zhihu 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 Thai Oil and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Oil Public and Zhihu Inc ADR, you can compare the effects of market volatilities on Thai Oil and Zhihu 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 Thai Oil with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Oil and Zhihu.
Diversification Opportunities for Thai Oil and Zhihu
Pay attention - limited upside
The 3 months correlation between Thai and Zhihu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR and Thai 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 Thai Oil Public are associated (or correlated) with Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of Thai Oil i.e., Thai Oil and Zhihu go up and down completely randomly.
Pair Corralation between Thai Oil and Zhihu
Assuming the 90 days horizon Thai Oil Public is expected to generate 0.4 times more return on investment than Zhihu. However, Thai Oil Public is 2.51 times less risky than Zhihu. It trades about 0.01 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.01 per unit of risk. If you would invest 145.00 in Thai Oil Public on September 3, 2024 and sell it today you would lose (1.00) from holding Thai Oil Public or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 48.28% |
| Values | Daily Returns |
Thai Oil Public vs. Zhihu Inc ADR
Performance |
| Timeline |
| Thai Oil Public |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zhihu Inc ADR |
Thai Oil and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Oil and Zhihu
The main advantage of trading using opposite Thai Oil and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Oil position performs unexpectedly, Zhihu 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 Zhihu will offset losses from the drop in Zhihu's long position.| Thai Oil vs. Zhihu Inc ADR | Thai Oil vs. Dave Busters Entertainment | Thai Oil vs. Weibo Corp | Thai Oil vs. RCS MediaGroup SpA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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