Correlation Between SVOA Public and Thoresen Thai

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

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

Diversification Opportunities for SVOA Public and Thoresen Thai

0.88

Correlation Coefficient

SVOA Public  Thoresen Thai

Very poor diversification

The 3 months correlation between SVOA and Thoresen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SVOA 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 SVOA Public 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 SVOA 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 SVOA Public i.e., SVOA Public and Thoresen Thai go up and down completely randomly.

Pair Corralation between SVOA Public and Thoresen Thai

Assuming the 90 days trading horizon SVOA Public is expected to under-perform the Thoresen Thai. But the stock apears to be less risky and, when comparing its historical volatility, SVOA Public is 1.53 times less risky than Thoresen Thai. The stock trades about -0.11 of its potential returns per unit of risk. The Thoresen Thai Agencies is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  481.00  in Thoresen Thai Agencies on December 21, 2024 and sell it today you would lose (39.00) from holding Thoresen Thai Agencies or give up 8.11% of portfolio value over 90 days.

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

SVOA Public  vs.  Thoresen Thai Agencies

SVOA Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days SVOA Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Thoresen Thai Agencies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thoresen Thai Agencies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with SVOA Public and Thoresen Thai

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

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.