Correlation Between BASF SE and PTT GLBL
Can any of the company-specific risk be diversified away by investing in both BASF SE 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 BASF SE and PTT GLBL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE and PTT GLBL CHEM NVDR , you can compare the effects of market volatilities on BASF SE 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 BASF SE with a short position of PTT GLBL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and PTT GLBL.
Diversification Opportunities for BASF SE and PTT GLBL
Poor diversification
The 3 months correlation between BASF and PTT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE 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 BASF SE 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 BASF SE 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 BASF SE i.e., BASF SE and PTT GLBL go up and down completely randomly.
Pair Corralation between BASF SE and PTT GLBL
Assuming the 90 days trading horizon BASF SE is expected to under-perform the PTT GLBL. But the stock apears to be less risky and, when comparing its historical volatility, BASF SE is 1.48 times less risky than PTT GLBL. The stock trades about 0.0 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BASF SE vs. PTT GLBL CHEM NVDR
Performance |
| Timeline |
| BASF SE |
| PTT GLBL CHEM |
BASF SE and PTT GLBL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and PTT GLBL
The main advantage of trading using opposite BASF SE and PTT GLBL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE 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.| BASF SE vs. United Utilities Group | BASF SE vs. Amkor Technology | BASF SE vs. GLG LIFE TECH | BASF SE vs. UNITED UTILITIES GR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |