Correlation Between PTT Global and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both PTT Global and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on PTT Global and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and BRIT AMER.
Diversification Opportunities for PTT Global and BRIT AMER
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between PTT and BRIT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of PTT Global i.e., PTT Global and BRIT AMER go up and down completely randomly.
Pair Corralation between PTT Global and BRIT AMER
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the BRIT AMER. In addition to that, PTT Global is 1.9 times more volatile than BRIT AMER TOBACCO. It trades about -0.04 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.38 per unit of volatility. If you would invest 3,203 in BRIT AMER TOBACCO on September 1, 2024 and sell it today you would earn a total of 388.00 from holding BRIT AMER TOBACCO or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| PTT Global Chemical |
| BRIT AMER TOBACCO |
PTT Global and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and BRIT AMER
The main advantage of trading using opposite PTT Global and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.The idea behind PTT Global Chemical and BRIT AMER TOBACCO 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.| BRIT AMER vs. Enter Air SA | BRIT AMER vs. International Consolidated Airlines | BRIT AMER vs. FORWARD AIR P | BRIT AMER vs. Norwegian Air Shuttle |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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