Correlation Between PTT Global and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both PTT Global and Gladstone Investment 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 PTT Global and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Global Chemical and Gladstone Investment, you can compare the effects of market volatilities on PTT Global and Gladstone Investment 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 PTT Global with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Gladstone Investment.
Diversification Opportunities for PTT Global and Gladstone Investment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PTT and Gladstone is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and PTT Global 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 PTT Global Chemical are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of PTT Global i.e., PTT Global and Gladstone Investment go up and down completely randomly.
Pair Corralation between PTT Global and Gladstone Investment
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 11.63 times more return on investment than Gladstone Investment. However, PTT Global is 11.63 times more volatile than Gladstone Investment. It trades about 0.03 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.06 per unit of risk. If you would invest 100.00 in PTT Global Chemical on August 31, 2024 and sell it today you would lose (37.00) from holding PTT Global Chemical or give up 37.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. Gladstone Investment
Performance |
| Timeline |
| PTT Global Chemical |
| Gladstone Investment |
PTT Global and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Gladstone Investment
The main advantage of trading using opposite PTT Global and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.The idea behind PTT Global Chemical and Gladstone Investment 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.| Gladstone Investment vs. QUEEN S ROAD | Gladstone Investment vs. Air Transport Services | Gladstone Investment vs. Gold Road Resources | Gladstone Investment vs. GOLD ROAD RES |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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