Correlation Between Thai Oil and Ai Energy

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

Diversification Opportunities for Thai Oil and Ai Energy

-0.1

Correlation Coefficient

Thai Oil  Ai Energy

Good diversification

The 3 months correlation between Thai and AIE is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Ai Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ai Energy 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 Ai Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ai Energy Public has no effect on the direction of Thai Oil i.e., Thai Oil and Ai Energy go up and down completely randomly.

Pair Corralation between Thai Oil and Ai Energy

Assuming the 90 days trading horizon Thai Oil Public is expected to under-perform the Ai Energy. But the stock apears to be less risky and, when comparing its historical volatility, Thai Oil Public is 1.71 times less risky than Ai Energy. The stock trades about -0.08 of its potential returns per unit of risk. The Ai Energy Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  93.00  in Ai Energy Public on December 19, 2024 and sell it today you would earn a total of  47.00  from holding Ai Energy Public or generate 50.54% return on investment over 90 days.

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

Thai Oil Public  vs.  Ai Energy Public

Thai Oil Public

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ai Energy Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ai Energy Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Ai Energy disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thai Oil and Ai Energy

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

The idea behind Thai Oil Public and Ai Energy 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.