Correlation Between Thai Oil and Bangchak Public
Can any of the company-specific risk be diversified away by investing in both Thai Oil and Bangchak Public 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 Bangchak Public 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 Bangchak Public, you can compare the effects of market volatilities on Thai Oil and Bangchak Public 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 Bangchak Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Oil and Bangchak Public.
Diversification Opportunities for Thai Oil and Bangchak Public
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thai and Bangchak is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Bangchak Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangchak Public 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 Bangchak Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangchak Public has no effect on the direction of Thai Oil i.e., Thai Oil and Bangchak Public go up and down completely randomly.
Pair Corralation between Thai Oil and Bangchak Public
Assuming the 90 days trading horizon Thai Oil Public is expected to under-perform the Bangchak Public. But the stock apears to be less risky and, when comparing its historical volatility, Thai Oil Public is 1.05 times less risky than Bangchak Public. The stock trades about -0.27 of its potential returns per unit of risk. The Bangchak Public is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 3,725 in Bangchak Public on August 29, 2024 and sell it today you would lose (600.00) from holding Bangchak Public or give up 16.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.56% |
| Values | Daily Returns |
Thai Oil Public vs. Bangchak Public
Performance |
| Timeline |
| Thai Oil Public |
| Bangchak Public |
Thai Oil and Bangchak Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Oil and Bangchak Public
The main advantage of trading using opposite Thai Oil and Bangchak Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Oil position performs unexpectedly, Bangchak Public 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 Bangchak Public will offset losses from the drop in Bangchak Public's long position.| Thai Oil vs. Copperwired Public | Thai Oil vs. Winnergy Medical Public | Thai Oil vs. PINTHONG INDUSTRIAL PARK | Thai Oil vs. Digital Telecommunications Infrastructure |
| Bangchak Public vs. Thai Oil Public | Bangchak Public vs. PTT Public | Bangchak Public vs. PTT Global Chemical | Bangchak Public vs. IRPC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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