Correlation Between Energy Absolute and Thoresen Thai

Can any of the company-specific risk be diversified away by investing in both Energy Absolute 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 Energy Absolute and Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Energy Absolute Public and Thoresen Thai Agencies, you can compare the effects of market volatilities on Energy Absolute 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 Energy Absolute with a short position of Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and Thoresen Thai.

Diversification Opportunities for Energy Absolute and Thoresen Thai

0.38

Correlation Coefficient

Energy Absolute  Thoresen Thai

Weak diversification

The 3 months correlation between Energy and Thoresen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public 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 Energy Absolute 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 Energy Absolute Public 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 Energy Absolute i.e., Energy Absolute and Thoresen Thai go up and down completely randomly.

Pair Corralation between Energy Absolute and Thoresen Thai

Assuming the 90 days horizon Energy Absolute is expected to generate 2.21 times less return on investment than Thoresen Thai. In addition to that, Energy Absolute is 2.41 times more volatile than Thoresen Thai Agencies. It trades about 0.01 of its total potential returns per unit of risk. Thoresen Thai Agencies is currently generating about 0.06 per unit of volatility. If you would invest  560.00  in Thoresen Thai Agencies on September 4, 2024 and sell it today you would earn a total of  40.00  from holding Thoresen Thai Agencies or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Energy Absolute Public  vs.  Thoresen Thai Agencies

Energy Absolute Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energy Absolute Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Energy Absolute is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Thoresen Thai Agencies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thoresen Thai Agencies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Thoresen Thai may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Energy Absolute and Thoresen Thai

The main advantage of trading using opposite Energy Absolute and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute 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.

The idea behind Energy Absolute Public and Thoresen Thai Agencies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.