Correlation Between PTT Global and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both PTT Global and BANK HANDLOWY 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 BANK HANDLOWY 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 BANK HANDLOWY, you can compare the effects of market volatilities on PTT Global and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and BANK HANDLOWY.
Diversification Opportunities for PTT Global and BANK HANDLOWY
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PTT and BANK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of PTT Global i.e., PTT Global and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between PTT Global and BANK HANDLOWY
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the BANK HANDLOWY. In addition to that, PTT Global is 2.09 times more volatile than BANK HANDLOWY. It trades about -0.25 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.18 per unit of volatility. If you would invest 2,030 in BANK HANDLOWY on September 23, 2024 and sell it today you would earn a total of 65.00 from holding BANK HANDLOWY or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. BANK HANDLOWY
Performance |
| Timeline |
| PTT Global Chemical |
| BANK HANDLOWY |
PTT Global and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and BANK HANDLOWY
The main advantage of trading using opposite PTT Global and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.The idea behind PTT Global Chemical and BANK HANDLOWY 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.| BANK HANDLOWY vs. GREENX METALS LTD | BANK HANDLOWY vs. Zijin Mining Group | BANK HANDLOWY vs. LION ONE METALS | BANK HANDLOWY vs. GRIFFIN MINING LTD |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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