Correlation Between PTT Global and International Consolidated
Can any of the company-specific risk be diversified away by investing in both PTT Global and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on PTT Global and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and International Consolidated.
Diversification Opportunities for PTT Global and International Consolidated
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTT and International is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of PTT Global i.e., PTT Global and International Consolidated go up and down completely randomly.
Pair Corralation between PTT Global and International Consolidated
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 9.21 times more return on investment than International Consolidated. However, PTT Global is 9.21 times more volatile than International Consolidated Airlines. It trades about 0.03 of its potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.08 per unit of risk. If you would invest 108.00 in PTT Global Chemical on October 11, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. International Consolidated Air
Performance |
| Timeline |
| PTT Global Chemical |
| International Consolidated |
PTT Global and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and International Consolidated
The main advantage of trading using opposite PTT Global and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.The idea behind PTT Global Chemical and International Consolidated Airlines 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.| International Consolidated vs. PTT Global Chemical | International Consolidated vs. AIR PRODCHEMICALS | International Consolidated vs. SEKISUI CHEMICAL | International Consolidated vs. X FAB Silicon Foundries |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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