Correlation Between PTT OIL+RETBUS-FOR-B and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both PTT OIL+RETBUS-FOR-B and Neste Oyj 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 PTT OIL+RETBUS-FOR-B and Neste Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT OILRETBUS FOR BA10 and Neste Oyj, you can compare the effects of market volatilities on PTT OIL+RETBUS-FOR-B and Neste Oyj 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 PTT OIL+RETBUS-FOR-B with a short position of Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT OIL+RETBUS-FOR-B and Neste Oyj.
Diversification Opportunities for PTT OIL+RETBUS-FOR-B and Neste Oyj
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PTT and Neste is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PTT OILRETBUS FOR BA10 and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj and PTT OIL+RETBUS-FOR-B 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 PTT OILRETBUS FOR BA10 are associated (or correlated) with Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of PTT OIL+RETBUS-FOR-B i.e., PTT OIL+RETBUS-FOR-B and Neste Oyj go up and down completely randomly.
Pair Corralation between PTT OIL+RETBUS-FOR-B and Neste Oyj
Assuming the 90 days horizon PTT OIL+RETBUS-FOR-B is expected to generate 9.42 times less return on investment than Neste Oyj. But when comparing it to its historical volatility, PTT OILRETBUS FOR BA10 is 1.12 times less risky than Neste Oyj. It trades about 0.01 of its potential returns per unit of risk. Neste Oyj is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,299 in Neste Oyj on September 12, 2024 and sell it today you would earn a total of 41.00 from holding Neste Oyj or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT OILRETBUS FOR BA10 vs. Neste Oyj
Performance |
| Timeline |
| PTT OIL+RETBUS-FOR-B |
| Neste Oyj |
PTT OIL+RETBUS-FOR-B and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT OIL+RETBUS-FOR-B and Neste Oyj
The main advantage of trading using opposite PTT OIL+RETBUS-FOR-B and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT OIL+RETBUS-FOR-B position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| PTT OIL+RETBUS-FOR-B vs. PTT OILRETBUS NVDR 10 | PTT OIL+RETBUS-FOR-B vs. Kunlun Energy | PTT OIL+RETBUS-FOR-B vs. IRPC PCL NVDR | PTT OIL+RETBUS-FOR-B vs. Idemitsu Kosan CoLtd |
| Neste Oyj vs. Superior Plus Corp | Neste Oyj vs. SIVERS SEMICONDUCTORS AB | Neste Oyj vs. Norsk Hydro ASA | Neste Oyj vs. Reliance Steel Aluminum |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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