Correlation Between Thai Oil and Freedom Internet

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

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

Diversification Opportunities for Thai Oil and Freedom Internet

1.0

Correlation Coefficient

Thai Oil  Freedom Internet

No risk reduction

The 3 months correlation between Thai and Freedom is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Freedom Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Internet and Thai 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 Thai Oil Public are associated (or correlated) with Freedom Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Internet has no effect on the direction of Thai Oil i.e., Thai Oil and Freedom Internet go up and down completely randomly.

Pair Corralation between Thai Oil and Freedom Internet

If you would invest  145.00  in Thai Oil Public on October 8, 2024 and sell it today you would lose (1.00) from holding Thai Oil Public or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	43.75%
Values	Daily Returns

Thai Oil Public  vs.  Freedom Internet Group

Thai Oil Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Oil Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Thai Oil is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Freedom Internet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freedom Internet Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Freedom Internet is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Thai Oil and Freedom Internet

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

The idea behind Thai Oil Public and Freedom Internet Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..