Correlation Between PTT Global and Hisense Home
Can any of the company-specific risk be diversified away by investing in both PTT Global and Hisense Home 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 Hisense Home 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 Hisense Home Appliances, you can compare the effects of market volatilities on PTT Global and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Hisense Home.
Diversification Opportunities for PTT Global and Hisense Home
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PTT and Hisense is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of PTT Global i.e., PTT Global and Hisense Home go up and down completely randomly.
Pair Corralation between PTT Global and Hisense Home
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 4.62 times more return on investment than Hisense Home. However, PTT Global is 4.62 times more volatile than Hisense Home Appliances. It trades about 0.04 of its potential returns per unit of risk. Hisense Home Appliances is currently generating about 0.07 per unit of risk. If you would invest 108.00 in PTT Global Chemical on August 31, 2024 and sell it today you would lose (44.00) from holding PTT Global Chemical or give up 40.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. Hisense Home Appliances
Performance |
| Timeline |
| PTT Global Chemical |
| Hisense Home Appliances |
PTT Global and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Hisense Home
The main advantage of trading using opposite PTT Global and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.The idea behind PTT Global Chemical and Hisense Home Appliances 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.| Hisense Home vs. SERI INDUSTRIAL EO | Hisense Home vs. SOUTHWEST AIRLINES | Hisense Home vs. Gol Intelligent Airlines | Hisense Home vs. Scandinavian Tobacco Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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