Correlation Between PTT Global and G-III Apparel
Can any of the company-specific risk be diversified away by investing in both PTT Global and G-III Apparel 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 G-III Apparel 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 G III Apparel Group, you can compare the effects of market volatilities on PTT Global and G-III Apparel 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 G-III Apparel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and G-III Apparel.
Diversification Opportunities for PTT Global and G-III Apparel
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PTT and G-III is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G-III Apparel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of PTT Global i.e., PTT Global and G-III Apparel go up and down completely randomly.
Pair Corralation between PTT Global and G-III Apparel
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 5.76 times more return on investment than G-III Apparel. However, PTT Global is 5.76 times more volatile than G III Apparel Group. It trades about 0.03 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.07 per unit of risk. If you would invest 95.00 in PTT Global Chemical on September 2, 2024 and sell it today you would lose (31.00) from holding PTT Global Chemical or give up 32.63% 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. G III Apparel Group
Performance |
| Timeline |
| PTT Global Chemical |
| G III Apparel |
PTT Global and G-III Apparel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and G-III Apparel
The main advantage of trading using opposite PTT Global and G-III Apparel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, G-III Apparel 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 G-III Apparel will offset losses from the drop in G-III Apparel's long position.The idea behind PTT Global Chemical and G III Apparel Group 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.| G-III Apparel vs. ASURE SOFTWARE | G-III Apparel vs. Rogers Communications | G-III Apparel vs. AXWAY SOFTWARE EO | G-III Apparel vs. Chunghwa Telecom Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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