Correlation Between Thai Oil and Idemitsu Kosan
Can any of the company-specific risk be diversified away by investing in both Thai Oil and Idemitsu Kosan 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 Idemitsu Kosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Oil PCL and Idemitsu Kosan CoLtd, you can compare the effects of market volatilities on Thai Oil and Idemitsu Kosan 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 Idemitsu Kosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Oil and Idemitsu Kosan.
Diversification Opportunities for Thai Oil and Idemitsu Kosan
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and Idemitsu is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil PCL and Idemitsu Kosan CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idemitsu Kosan CoLtd 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 PCL are associated (or correlated) with Idemitsu Kosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idemitsu Kosan CoLtd has no effect on the direction of Thai Oil i.e., Thai Oil and Idemitsu Kosan go up and down completely randomly.
Pair Corralation between Thai Oil and Idemitsu Kosan
Assuming the 90 days horizon Thai Oil PCL is expected to under-perform the Idemitsu Kosan. In addition to that, Thai Oil is 22.89 times more volatile than Idemitsu Kosan CoLtd. It trades about -0.02 of its total potential returns per unit of risk. Idemitsu Kosan CoLtd is currently generating about 0.22 per unit of volatility. If you would invest 650.00 in Idemitsu Kosan CoLtd on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Idemitsu Kosan CoLtd or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Oil PCL vs. Idemitsu Kosan CoLtd
Performance |
| Timeline |
| Thai Oil PCL |
| Idemitsu Kosan CoLtd |
Thai Oil and Idemitsu Kosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Oil and Idemitsu Kosan
The main advantage of trading using opposite Thai Oil and Idemitsu Kosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Oil position performs unexpectedly, Idemitsu Kosan 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 Idemitsu Kosan will offset losses from the drop in Idemitsu Kosan's long position.| Thai Oil vs. Neste Oyj | Thai Oil vs. Cosan SA ADR | Thai Oil vs. Ultrapar Participacoes SA | Thai Oil vs. Delek Logistics Partners |
| Idemitsu Kosan vs. Cosan SA ADR | Idemitsu Kosan vs. Star Gas Partners | Idemitsu Kosan vs. Valvoline | Idemitsu Kosan vs. Zoom Video Communications |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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