Correlation Between Thai Vegetable and Univanich Palm
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable and Univanich Palm 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 Vegetable and Univanich Palm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Vegetable Oil and Univanich Palm Oil, you can compare the effects of market volatilities on Thai Vegetable and Univanich Palm 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 Vegetable with a short position of Univanich Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and Univanich Palm.
Diversification Opportunities for Thai Vegetable and Univanich Palm
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thai and Univanich is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil and Univanich Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univanich Palm Oil and Thai Vegetable 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 Vegetable Oil are associated (or correlated) with Univanich Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univanich Palm Oil has no effect on the direction of Thai Vegetable i.e., Thai Vegetable and Univanich Palm go up and down completely randomly.
Pair Corralation between Thai Vegetable and Univanich Palm
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to under-perform the Univanich Palm. But the stock apears to be less risky and, when comparing its historical volatility, Thai Vegetable Oil is 1.47 times less risky than Univanich Palm. The stock trades about -0.02 of its potential returns per unit of risk. The Univanich Palm Oil is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 920.00 in Univanich Palm Oil on December 2, 2024 and sell it today you would earn a total of 20.00 from holding Univanich Palm Oil or generate 2.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Thai Vegetable Oil vs. Univanich Palm Oil
Performance |
Timeline |
Thai Vegetable Oil |
Univanich Palm Oil |
Thai Vegetable and Univanich Palm Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thai Vegetable and Univanich Palm
The main advantage of trading using opposite Thai Vegetable and Univanich Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable position performs unexpectedly, Univanich Palm 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 Univanich Palm will offset losses from the drop in Univanich Palm's long position.Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. TISCO Financial Group | Thai Vegetable vs. Thanachart Capital Public |
Univanich Palm vs. Chumporn Palm Oil | Univanich Palm vs. United Palm Oil | Univanich Palm vs. Thai Vegetable Oil | Univanich Palm vs. Sri Trang Agro Industry |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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