Correlation Between FORMPIPE SOFTWARE and PTT Global
Can any of the company-specific risk be diversified away by investing in both FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORMPIPE SOFTWARE AB and PTT Global Chemical, you can compare the effects of market volatilities on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORMPIPE SOFTWARE and PTT Global.
Diversification Opportunities for FORMPIPE SOFTWARE and PTT Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between FORMPIPE and PTT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and PTT Global go up and down completely randomly.
Pair Corralation between FORMPIPE SOFTWARE and PTT Global
Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to generate 0.98 times more return on investment than PTT Global. However, FORMPIPE SOFTWARE AB is 1.02 times less risky than PTT Global. It trades about 0.03 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.15 per unit of risk. If you would invest 207.00 in FORMPIPE SOFTWARE AB on August 30, 2024 and sell it today you would earn a total of 5.00 from holding FORMPIPE SOFTWARE AB or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FORMPIPE SOFTWARE AB vs. PTT Global Chemical
Performance |
| Timeline |
| FORMPIPE SOFTWARE |
| PTT Global Chemical |
FORMPIPE SOFTWARE and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORMPIPE SOFTWARE and PTT Global
The main advantage of trading using opposite FORMPIPE SOFTWARE and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE 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.The idea behind FORMPIPE SOFTWARE AB and PTT Global Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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