Correlation Between Thai Oil and ASN Broker

Can any of the company-specific risk be diversified away by investing in both Thai Oil and ASN Broker 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 ASN Broker 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 ASN Broker Public, you can compare the effects of market volatilities on Thai Oil and ASN Broker 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 ASN Broker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Oil and ASN Broker.

Diversification Opportunities for Thai Oil and ASN Broker

-0.08

Correlation Coefficient

Thai Oil  ASN Broker

Good diversification

The 3 months correlation between Thai and ASN is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and ASN Broker Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASN Broker Public 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 ASN Broker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASN Broker Public has no effect on the direction of Thai Oil i.e., Thai Oil and ASN Broker go up and down completely randomly.

Pair Corralation between Thai Oil and ASN Broker

Assuming the 90 days trading horizon Thai Oil Public is expected to generate 19.01 times more return on investment than ASN Broker. However, Thai Oil is 19.01 times more volatile than ASN Broker Public. It trades about 0.06 of its potential returns per unit of risk. ASN Broker Public is currently generating about -0.04 per unit of risk. If you would invest  5,683  in Thai Oil Public on October 12, 2024 and sell it today you would lose (1,858) from holding Thai Oil Public or give up 32.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.96%
Values	Daily Returns

Thai Oil Public  vs.  ASN Broker Public

Thai Oil Public

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Thai Oil Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak fundamental drivers, Thai Oil sustained solid returns over the last few months and may actually be approaching a breakup point.

ASN Broker Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASN Broker Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Thai Oil and ASN Broker

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

The idea behind Thai Oil Public and ASN Broker Public 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.