Correlation Between BP PLC and PTT PCL
Can any of the company-specific risk be diversified away by investing in both BP PLC and PTT PCL 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 BP PLC and PTT PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP PLC ADR and PTT PCL ADR, you can compare the effects of market volatilities on BP PLC and PTT PCL 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 BP PLC with a short position of PTT PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP PLC and PTT PCL.
Diversification Opportunities for BP PLC and PTT PCL
Modest diversification
The 3 months correlation between BP PLC and PTT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BP PLC ADR and PTT PCL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT PCL ADR and BP PLC 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 BP PLC ADR are associated (or correlated) with PTT PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT PCL ADR has no effect on the direction of BP PLC i.e., BP PLC and PTT PCL go up and down completely randomly.
Pair Corralation between BP PLC and PTT PCL
Allowing for the 90-day total investment horizon BP PLC is expected to generate 11.28 times less return on investment than PTT PCL. In addition to that, BP PLC is 2.15 times more volatile than PTT PCL ADR. It trades about 0.0 of its total potential returns per unit of risk. PTT PCL ADR is currently generating about 0.06 per unit of volatility. If you would invest 464.00 in PTT PCL ADR on November 9, 2024 and sell it today you would earn a total of 45.00 from holding PTT PCL ADR or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.52% |
| Values | Daily Returns |
BP PLC ADR vs. PTT PCL ADR
Performance |
| Timeline |
| BP PLC ADR |
| PTT PCL ADR |
BP PLC and PTT PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP PLC and PTT PCL
The main advantage of trading using opposite BP PLC and PTT PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP PLC position performs unexpectedly, PTT PCL 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 PCL will offset losses from the drop in PTT PCL's long position.| BP PLC vs. TotalEnergies SE ADR | BP PLC vs. Chevron Corp | BP PLC vs. Exxon Mobil Corp | BP PLC vs. Equinor ASA ADR |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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