Correlation Between Thai Union and Sea Oil
Can any of the company-specific risk be diversified away by investing in both Thai Union and Sea Oil 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 Union and Sea Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Union Group and Sea Oil Public, you can compare the effects of market volatilities on Thai Union and Sea Oil 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 Union with a short position of Sea Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Sea Oil.
Diversification Opportunities for Thai Union and Sea Oil
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thai and Sea is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and Sea Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Oil Public and Thai Union 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 Union Group are associated (or correlated) with Sea Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Oil Public has no effect on the direction of Thai Union i.e., Thai Union and Sea Oil go up and down completely randomly.
Pair Corralation between Thai Union and Sea Oil
Assuming the 90 days trading horizon Thai Union Group is expected to generate 0.62 times more return on investment than Sea Oil. However, Thai Union Group is 1.62 times less risky than Sea Oil. It trades about 0.26 of its potential returns per unit of risk. Sea Oil Public is currently generating about 0.12 per unit of risk. If you would invest 1,301 in Thai Union Group on August 25, 2024 and sell it today you would earn a total of 69.00 from holding Thai Union Group or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Union Group vs. Sea Oil Public
Performance |
| Timeline |
| Thai Union Group |
| Sea Oil Public |
Thai Union and Sea Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and Sea Oil
The main advantage of trading using opposite Thai Union and Sea Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, Sea Oil 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 Sea Oil will offset losses from the drop in Sea Oil's long position.| Thai Union vs. Chamni Eye PCL | Thai Union vs. Siam Global House | Thai Union vs. The Erawan Group | Thai Union vs. Ditto Public |
| Sea Oil vs. Krung Thai Bank | Sea Oil vs. Thai Union Group | Sea Oil vs. PTT Public | Sea Oil vs. PTT Exploration and |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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