Correlation Between Diamond Building and PTT Public
Can any of the company-specific risk be diversified away by investing in both Diamond Building and PTT Public 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 Diamond Building and PTT Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Building Products and PTT Public, you can compare the effects of market volatilities on Diamond Building and PTT Public 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 Diamond Building with a short position of PTT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Building and PTT Public.
Diversification Opportunities for Diamond Building and PTT Public
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diamond and PTT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Building Products and PTT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Public and Diamond Building 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 Diamond Building Products are associated (or correlated) with PTT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Public has no effect on the direction of Diamond Building i.e., Diamond Building and PTT Public go up and down completely randomly.
Pair Corralation between Diamond Building and PTT Public
Assuming the 90 days trading horizon Diamond Building is expected to generate 1.51 times less return on investment than PTT Public. But when comparing it to its historical volatility, Diamond Building Products is 1.55 times less risky than PTT Public. It trades about 0.03 of its potential returns per unit of risk. PTT Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,949 in PTT Public on August 26, 2024 and sell it today you would earn a total of 426.00 from holding PTT Public or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Building Products vs. PTT Public
Performance |
| Timeline |
| Diamond Building Products |
| PTT Public |
Diamond Building and PTT Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Building and PTT Public
The main advantage of trading using opposite Diamond Building and PTT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Building position performs unexpectedly, PTT Public 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 Public will offset losses from the drop in PTT Public's long position.| Diamond Building vs. PTT Public | Diamond Building vs. PTT Exploration and | Diamond Building vs. CP ALL Public | Diamond Building vs. Kasikornbank Public |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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