Correlation Between Sanyo Chemical and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and Thoresen Thai 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 Sanyo Chemical and Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Chemical Industries and Thoresen Thai Agencies, you can compare the effects of market volatilities on Sanyo Chemical and Thoresen Thai 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 Sanyo Chemical with a short position of Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Thoresen Thai.
Diversification Opportunities for Sanyo Chemical and Thoresen Thai
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sanyo and Thoresen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies and Sanyo Chemical 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 Sanyo Chemical Industries are associated (or correlated) with Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and Thoresen Thai go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Thoresen Thai
Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the Thoresen Thai. But the stock apears to be less risky and, when comparing its historical volatility, Sanyo Chemical Industries is 3.05 times less risky than Thoresen Thai. The stock trades about -0.02 of its potential returns per unit of risk. The Thoresen Thai Agencies is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Thoresen Thai Agencies on October 14, 2024 and sell it today you would lose (9.00) from holding Thoresen Thai Agencies or give up 40.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Thoresen Thai Agencies
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Thoresen Thai Agencies |
Sanyo Chemical and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Thoresen Thai
The main advantage of trading using opposite Sanyo Chemical and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, Thoresen Thai 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 Thoresen Thai will offset losses from the drop in Thoresen Thai's long position.| Sanyo Chemical vs. Cleanaway Waste Management | Sanyo Chemical vs. LANDSEA GREEN MANAGEMENT | Sanyo Chemical vs. United Natural Foods | Sanyo Chemical vs. CONAGRA FOODS |
| Thoresen Thai vs. MELIA HOTELS | Thoresen Thai vs. Park Hotels Resorts | Thoresen Thai vs. Sanyo Chemical Industries | Thoresen Thai vs. SEKISUI CHEMICAL |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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