Correlation Between PTT OIL+RETBUS-FOR-B and Reliance Industries
Can any of the company-specific risk be diversified away by investing in both PTT OIL+RETBUS-FOR-B and Reliance Industries 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 Reliance Industries 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 Reliance Industries Limited, you can compare the effects of market volatilities on PTT OIL+RETBUS-FOR-B and Reliance Industries 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 Reliance Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT OIL+RETBUS-FOR-B and Reliance Industries.
Diversification Opportunities for PTT OIL+RETBUS-FOR-B and Reliance Industries
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PTT and Reliance is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding PTT OILRETBUS FOR BA10 and Reliance Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Industries 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 Reliance Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Industries has no effect on the direction of PTT OIL+RETBUS-FOR-B i.e., PTT OIL+RETBUS-FOR-B and Reliance Industries go up and down completely randomly.
Pair Corralation between PTT OIL+RETBUS-FOR-B and Reliance Industries
Assuming the 90 days horizon PTT OIL+RETBUS-FOR-B is expected to generate 9.09 times less return on investment than Reliance Industries. In addition to that, PTT OIL+RETBUS-FOR-B is 1.18 times more volatile than Reliance Industries Limited. It trades about 0.01 of its total potential returns per unit of risk. Reliance Industries Limited is currently generating about 0.1 per unit of volatility. If you would invest 5,560 in Reliance Industries Limited on September 12, 2024 and sell it today you would earn a total of 180.00 from holding Reliance Industries Limited or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT OILRETBUS FOR BA10 vs. Reliance Industries Limited
Performance |
| Timeline |
| PTT OIL+RETBUS-FOR-B |
| Reliance Industries |
PTT OIL+RETBUS-FOR-B and Reliance Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT OIL+RETBUS-FOR-B and Reliance Industries
The main advantage of trading using opposite PTT OIL+RETBUS-FOR-B and Reliance Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT OIL+RETBUS-FOR-B position performs unexpectedly, Reliance Industries 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 Reliance Industries will offset losses from the drop in Reliance Industries' 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 |
| Reliance Industries vs. Tencent Holdings | Reliance Industries vs. Thermo Fisher Scientific | Reliance Industries vs. Exxon Mobil | Reliance Industries vs. SoftBank Group Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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