Correlation Between AIR LIQUIDE and PTT GLBL
Can any of the company-specific risk be diversified away by investing in both AIR LIQUIDE and PTT GLBL 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 AIR LIQUIDE and PTT GLBL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR LIQUIDE ADR and PTT GLBL CHEM NVDR , you can compare the effects of market volatilities on AIR LIQUIDE and PTT GLBL 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 AIR LIQUIDE with a short position of PTT GLBL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR LIQUIDE and PTT GLBL.
Diversification Opportunities for AIR LIQUIDE and PTT GLBL
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AIR and PTT is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AIR LIQUIDE ADR and PTT GLBL CHEM NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT GLBL CHEM and AIR LIQUIDE 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 AIR LIQUIDE ADR are associated (or correlated) with PTT GLBL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT GLBL CHEM has no effect on the direction of AIR LIQUIDE i.e., AIR LIQUIDE and PTT GLBL go up and down completely randomly.
Pair Corralation between AIR LIQUIDE and PTT GLBL
Assuming the 90 days trading horizon AIR LIQUIDE ADR is expected to under-perform the PTT GLBL. But the stock apears to be less risky and, when comparing its historical volatility, AIR LIQUIDE ADR is 2.02 times less risky than PTT GLBL. The stock trades about -0.06 of its potential returns per unit of risk. The PTT GLBL CHEM NVDR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 67.00 in PTT GLBL CHEM NVDR on September 4, 2024 and sell it today you would earn a total of 1.00 from holding PTT GLBL CHEM NVDR or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR LIQUIDE ADR vs. PTT GLBL CHEM NVDR
Performance |
| Timeline |
| AIR LIQUIDE ADR |
| PTT GLBL CHEM |
AIR LIQUIDE and PTT GLBL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR LIQUIDE and PTT GLBL
The main advantage of trading using opposite AIR LIQUIDE and PTT GLBL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR LIQUIDE position performs unexpectedly, PTT GLBL 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 GLBL will offset losses from the drop in PTT GLBL's long position.The idea behind AIR LIQUIDE ADR and PTT GLBL CHEM NVDR 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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