Correlation Between AIR PRODCHEMICALS and PTT Global
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and PTT Global Chemical, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and PTT Global.
Diversification Opportunities for AIR PRODCHEMICALS and PTT Global
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and PTT is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and PTT Global go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and PTT Global
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.48 times more return on investment than PTT Global. However, AIR PRODCHEMICALS is 2.08 times less risky than PTT Global. It trades about 0.52 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.31 per unit of risk. If you would invest 27,730 in AIR PRODCHEMICALS on November 2, 2024 and sell it today you would earn a total of 3,680 from holding AIR PRODCHEMICALS or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. PTT Global Chemical
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| PTT Global Chemical |
AIR PRODCHEMICALS and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and PTT Global
The main advantage of trading using opposite AIR PRODCHEMICALS and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc |
| PTT Global vs. AWILCO DRILLING PLC | PTT Global vs. Jacquet Metal Service | PTT Global vs. Retail Estates NV | PTT Global vs. BURLINGTON STORES |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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