Correlation Between Visteon Corp and Thai Oil

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Can any of the company-specific risk be diversified away by investing in both Visteon Corp and Thai Oil 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 Visteon Corp and Thai Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visteon Corp and Thai Oil Public, you can compare the effects of market volatilities on Visteon Corp and Thai Oil 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 Visteon Corp with a short position of Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visteon Corp and Thai Oil.

Diversification Opportunities for Visteon Corp and Thai Oil

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Visteon and Thai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil Public and Visteon Corp 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 Visteon Corp are associated (or correlated) with Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil Public has no effect on the direction of Visteon Corp i.e., Visteon Corp and Thai Oil go up and down completely randomly.

Pair Corralation between Visteon Corp and Thai Oil

Allowing for the 90-day total investment horizon Visteon Corp is expected to under-perform the Thai Oil. In addition to that, Visteon Corp is 1.09 times more volatile than Thai Oil Public. It trades about -0.04 of its total potential returns per unit of risk. Thai Oil Public is currently generating about 0.01 per unit of volatility. If you would invest  145.00  in Thai Oil Public on October 3, 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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy44.24%
ValuesDaily Returns

Visteon Corp  vs.  Thai Oil Public

 Performance 
       Timeline  
Visteon Corp 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Visteon Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Visteon Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Thai Oil Public 

Risk-Adjusted Performance

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Weak
 
Strong
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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Visteon Corp and Thai Oil Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Visteon Corp and Thai Oil

The main advantage of trading using opposite Visteon Corp and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visteon Corp position performs unexpectedly, Thai Oil 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 Thai Oil will offset losses from the drop in Thai Oil's long position.
The idea behind Visteon Corp and Thai Oil 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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