Correlation Between China Pacific and PTT Global
Can any of the company-specific risk be diversified away by investing in both China Pacific and PTT Global 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 China Pacific and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Pacific Insurance and PTT Global Chemical, you can compare the effects of market volatilities on China Pacific and PTT Global 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 China Pacific with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Pacific and PTT Global.
Diversification Opportunities for China Pacific and PTT Global
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and PTT is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding China Pacific Insurance and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical and China Pacific 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 China Pacific Insurance are associated (or correlated) with PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of China Pacific i.e., China Pacific and PTT Global go up and down completely randomly.
Pair Corralation between China Pacific and PTT Global
Assuming the 90 days horizon China Pacific Insurance is expected to generate 1.09 times more return on investment than PTT Global. However, China Pacific is 1.09 times more volatile than PTT Global Chemical. It trades about -0.06 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.12 per unit of risk. If you would invest 314.00 in China Pacific Insurance on September 4, 2024 and sell it today you would lose (14.00) from holding China Pacific Insurance or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Pacific Insurance vs. PTT Global Chemical
Performance |
| Timeline |
| China Pacific Insurance |
| PTT Global Chemical |
China Pacific and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Pacific and PTT Global
The main advantage of trading using opposite China Pacific and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Pacific position performs unexpectedly, PTT Global 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 PTT Global will offset losses from the drop in PTT Global's long position.| China Pacific vs. BJs Wholesale Club | China Pacific vs. Fast Retailing Co | China Pacific vs. BURLINGTON STORES | China Pacific vs. Digilife Technologies Limited |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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