Correlation Between Thai Oil and GULF ENERGY
Can any of the company-specific risk be diversified away by investing in both Thai Oil and GULF ENERGY 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 GULF ENERGY 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 GULF ENERGY DEVELOPMENT NVDR, you can compare the effects of market volatilities on Thai Oil and GULF ENERGY 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 GULF ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Oil and GULF ENERGY.
Diversification Opportunities for Thai Oil and GULF ENERGY
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and GULF is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and GULF ENERGY DEVELOPMENT NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GULF ENERGY DEVELOPMENT 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 GULF ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GULF ENERGY DEVELOPMENT has no effect on the direction of Thai Oil i.e., Thai Oil and GULF ENERGY go up and down completely randomly.
Pair Corralation between Thai Oil and GULF ENERGY
Assuming the 90 days trading horizon Thai Oil Public is expected to under-perform the GULF ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, Thai Oil Public is 1.94 times less risky than GULF ENERGY. The stock trades about -0.25 of its potential returns per unit of risk. The GULF ENERGY DEVELOPMENT NVDR is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,750 in GULF ENERGY DEVELOPMENT NVDR on September 2, 2024 and sell it today you would earn a total of 1,300 from holding GULF ENERGY DEVELOPMENT NVDR or generate 27.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Oil Public vs. GULF ENERGY DEVELOPMENT NVDR
Performance |
| Timeline |
| Thai Oil Public |
| GULF ENERGY DEVELOPMENT |
Thai Oil and GULF ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Oil and GULF ENERGY
The main advantage of trading using opposite Thai Oil and GULF ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Oil position performs unexpectedly, GULF ENERGY 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 GULF ENERGY will offset losses from the drop in GULF ENERGY's long position.| Thai Oil vs. Star Petroleum Refining | Thai Oil vs. Power Solution Technologies | Thai Oil vs. Kingsmen CMTI Public | Thai Oil vs. Project Planning Service |
| GULF ENERGY vs. Thai Oil Public | GULF ENERGY vs. Electricity Generating Public | GULF ENERGY vs. Ratch Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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