Correlation Between Globe Trade and PTT Global
Can any of the company-specific risk be diversified away by investing in both Globe Trade 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 Globe Trade and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Trade Centre and PTT Global Chemical, you can compare the effects of market volatilities on Globe Trade 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 Globe Trade with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and PTT Global.
Diversification Opportunities for Globe Trade and PTT Global
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Globe and PTT is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre 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 Globe Trade 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 Globe Trade Centre 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 Globe Trade i.e., Globe Trade and PTT Global go up and down completely randomly.
Pair Corralation between Globe Trade and PTT Global
Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the PTT Global. But the stock apears to be less risky and, when comparing its historical volatility, Globe Trade Centre is 13.63 times less risky than PTT Global. The stock trades about -0.22 of its potential returns per unit of risk. The PTT Global Chemical is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 62.00 in PTT Global Chemical on August 27, 2024 and sell it today you would earn a total of 4.00 from holding PTT Global Chemical or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Trade Centre vs. PTT Global Chemical
Performance |
| Timeline |
| Globe Trade Centre |
| PTT Global Chemical |
Globe Trade and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and PTT Global
The main advantage of trading using opposite Globe Trade and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade 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.| Globe Trade vs. IMAGIN MEDICAL INC | Globe Trade vs. Geratherm Medical AG | Globe Trade vs. EPSILON HEALTHCARE LTD | Globe Trade vs. Diamyd Medical AB |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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