Correlation Between PTT Global and Heidelberg Materials
Can any of the company-specific risk be diversified away by investing in both PTT Global and Heidelberg Materials 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 Heidelberg Materials 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 Heidelberg Materials AG, you can compare the effects of market volatilities on PTT Global and Heidelberg Materials 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 Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Heidelberg Materials.
Diversification Opportunities for PTT Global and Heidelberg Materials
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTT and Heidelberg is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials 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 Heidelberg Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidelberg Materials has no effect on the direction of PTT Global i.e., PTT Global and Heidelberg Materials go up and down completely randomly.
Pair Corralation between PTT Global and Heidelberg Materials
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Heidelberg Materials. In addition to that, PTT Global is 2.5 times more volatile than Heidelberg Materials AG. It trades about -0.05 of its total potential returns per unit of risk. Heidelberg Materials AG is currently generating about -0.05 per unit of volatility. If you would invest 12,675 in Heidelberg Materials AG on October 12, 2024 and sell it today you would lose (185.00) from holding Heidelberg Materials AG or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. Heidelberg Materials AG
Performance |
| Timeline |
| PTT Global Chemical |
| Heidelberg Materials |
PTT Global and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Heidelberg Materials
The main advantage of trading using opposite PTT Global and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, Heidelberg Materials 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 Heidelberg Materials will offset losses from the drop in Heidelberg Materials' long position.The idea behind PTT Global Chemical and Heidelberg Materials AG 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.| Heidelberg Materials vs. PTT Global Chemical | Heidelberg Materials vs. Soken Chemical Engineering | Heidelberg Materials vs. TRI CHEMICAL LABORATINC | Heidelberg Materials vs. CyberArk Software |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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