Correlation Between Apple and PTT Global
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and PTT Global Chemical, you can compare the effects of market volatilities on Apple 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 Apple with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and PTT Global.
Diversification Opportunities for Apple and PTT Global
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apple and PTT is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and PTT Global go up and down completely randomly.
Pair Corralation between Apple and PTT Global
Assuming the 90 days trading horizon Apple is expected to generate 10.07 times less return on investment than PTT Global. But when comparing it to its historical volatility, Apple Inc is 16.07 times less risky than PTT Global. It trades about 0.07 of its potential returns per unit of risk. PTT Global Chemical is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 96.00 in PTT Global Chemical on August 29, 2024 and sell it today you would lose (31.00) from holding PTT Global Chemical or give up 32.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. PTT Global Chemical
Performance |
| Timeline |
| Apple Inc |
| PTT Global Chemical |
Apple and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and PTT Global
The main advantage of trading using opposite Apple and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Ryanair Holdings plc | Apple vs. SBA Communications Corp | Apple vs. Consolidated Communications Holdings | Apple vs. Singapore Telecommunications 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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