Correlation Between PTT Global and Chunghwa Telecom
Can any of the company-specific risk be diversified away by investing in both PTT Global and Chunghwa Telecom 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 Chunghwa Telecom 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 Chunghwa Telecom Co, you can compare the effects of market volatilities on PTT Global and Chunghwa Telecom 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 Chunghwa Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Chunghwa Telecom.
Diversification Opportunities for PTT Global and Chunghwa Telecom
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTT and Chunghwa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Chunghwa Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Telecom 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 Chunghwa Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Telecom has no effect on the direction of PTT Global i.e., PTT Global and Chunghwa Telecom go up and down completely randomly.
Pair Corralation between PTT Global and Chunghwa Telecom
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Chunghwa Telecom. In addition to that, PTT Global is 4.02 times more volatile than Chunghwa Telecom Co. It trades about -0.28 of its total potential returns per unit of risk. Chunghwa Telecom Co is currently generating about 0.07 per unit of volatility. If you would invest 3,660 in Chunghwa Telecom Co on November 27, 2024 and sell it today you would earn a total of 40.00 from holding Chunghwa Telecom Co or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. Chunghwa Telecom Co
Performance |
| Timeline |
| PTT Global Chemical |
| Chunghwa Telecom |
PTT Global and Chunghwa Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Chunghwa Telecom
The main advantage of trading using opposite PTT Global and Chunghwa Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, Chunghwa Telecom 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 Chunghwa Telecom will offset losses from the drop in Chunghwa Telecom's long position.| PTT Global vs. Jacquet Metal Service | PTT Global vs. Information Services International Dentsu | PTT Global vs. De Grey Mining | PTT Global vs. GALENA MINING LTD |
| Chunghwa Telecom vs. TRADEGATE | Chunghwa Telecom vs. Eidesvik Offshore ASA | Chunghwa Telecom vs. GOME Retail Holdings | Chunghwa Telecom vs. EIDESVIK OFFSHORE NK |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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