Correlation Between Sea Oil and Moong Pattana

Can any of the company-specific risk be diversified away by investing in both Sea Oil and Moong Pattana 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 Sea Oil and Moong Pattana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sea Oil Public and Moong Pattana International, you can compare the effects of market volatilities on Sea Oil and Moong Pattana 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 Sea Oil with a short position of Moong Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Oil and Moong Pattana.

Diversification Opportunities for Sea Oil and Moong Pattana

-0.49

Correlation Coefficient

Sea Oil  Moong Pattana

Very good diversification

The 3 months correlation between Sea and Moong is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sea Oil Public and Moong Pattana International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moong Pattana Intern and Sea 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 Sea Oil Public are associated (or correlated) with Moong Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moong Pattana Intern has no effect on the direction of Sea Oil i.e., Sea Oil and Moong Pattana go up and down completely randomly.

Pair Corralation between Sea Oil and Moong Pattana

Assuming the 90 days trading horizon Sea Oil Public is expected to generate 1.29 times more return on investment than Moong Pattana. However, Sea Oil is 1.29 times more volatile than Moong Pattana International. It trades about 0.04 of its potential returns per unit of risk. Moong Pattana International is currently generating about -0.13 per unit of risk. If you would invest  242.00  in Sea Oil Public on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Sea Oil Public or generate 2.48% return on investment over 90 days.

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

Sea Oil Public  vs.  Moong Pattana International

Sea Oil Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sea Oil Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sea Oil is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Moong Pattana Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moong Pattana International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sea Oil and Moong Pattana

The main advantage of trading using opposite Sea Oil and Moong Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea Oil position performs unexpectedly, Moong Pattana 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 Moong Pattana will offset losses from the drop in Moong Pattana's long position.

The idea behind Sea Oil Public and Moong Pattana International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.