Correlation Between Thai Oil and Porn Prom

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

Diversification Opportunities for Thai Oil and Porn Prom

0.46

Correlation Coefficient

Thai Oil  Porn Prom

Very weak diversification

The 3 months correlation between Thai and Porn is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Thai Oil Public and Porn Prom Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porn Prom Metal 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 Porn Prom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porn Prom Metal has no effect on the direction of Thai Oil i.e., Thai Oil and Porn Prom go up and down completely randomly.

Pair Corralation between Thai Oil and Porn Prom

Assuming the 90 days trading horizon Thai Oil Public is expected to under-perform the Porn Prom. But the stock apears to be less risky and, when comparing its historical volatility, Thai Oil Public is 1.35 times less risky than Porn Prom. The stock trades about -0.18 of its potential returns per unit of risk. The Porn Prom Metal is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  170.00  in Porn Prom Metal on October 26, 2024 and sell it today you would earn a total of  3.00  from holding Porn Prom Metal or generate 1.76% return on investment over 90 days.

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

Thai Oil Public  vs.  Porn Prom Metal

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 conflicting 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.

Porn Prom Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Porn Prom Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's primary 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 Porn Prom

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

The idea behind Thai Oil Public and Porn Prom Metal 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.