Correlation Between Thai Oil and Asian Sea
Can any of the company-specific risk be diversified away by investing in both Thai Oil and Asian Sea 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 Asian Sea 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 Asian Sea, you can compare the effects of market volatilities on Thai Oil and Asian Sea 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 Asian Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Oil and Asian Sea.
Diversification Opportunities for Thai Oil and Asian Sea
Average diversification
The 3 months correlation between Thai and Asian is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Asian Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Sea 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 Asian Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Sea has no effect on the direction of Thai Oil i.e., Thai Oil and Asian Sea go up and down completely randomly.
Pair Corralation between Thai Oil and Asian Sea
Assuming the 90 days trading horizon Thai Oil Public is expected to under-perform the Asian Sea. In addition to that, Thai Oil is 2.73 times more volatile than Asian Sea. It trades about -0.26 of its total potential returns per unit of risk. Asian Sea is currently generating about -0.26 per unit of volatility. If you would invest 915.00 in Asian Sea on August 31, 2024 and sell it today you would lose (65.00) from holding Asian Sea or give up 7.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thai Oil Public vs. Asian Sea
Performance |
| Timeline |
| Thai Oil Public |
| Asian Sea |
Thai Oil and Asian Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Oil and Asian Sea
The main advantage of trading using opposite Thai Oil and Asian Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Oil position performs unexpectedly, Asian Sea 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 Asian Sea will offset losses from the drop in Asian Sea's long position.| Thai Oil vs. Krung Thai Bank | Thai Oil vs. Thai Union Group | Thai Oil vs. PTT Public | Thai Oil vs. Supalai Public |
| Asian Sea vs. GFPT Public | Asian Sea vs. Carabao Group Public | Asian Sea vs. Thai Union Group | Asian Sea vs. Agripure Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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