Correlation Between PTT Global and KOBE STEEL
Can any of the company-specific risk be diversified away by investing in both PTT Global and KOBE STEEL 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 KOBE STEEL 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 KOBE STEEL LTD, you can compare the effects of market volatilities on PTT Global and KOBE STEEL 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 KOBE STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and KOBE STEEL.
Diversification Opportunities for PTT Global and KOBE STEEL
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PTT and KOBE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and KOBE STEEL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOBE STEEL LTD 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 KOBE STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOBE STEEL LTD has no effect on the direction of PTT Global i.e., PTT Global and KOBE STEEL go up and down completely randomly.
Pair Corralation between PTT Global and KOBE STEEL
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the KOBE STEEL. In addition to that, PTT Global is 2.23 times more volatile than KOBE STEEL LTD. It trades about -0.2 of its total potential returns per unit of risk. KOBE STEEL LTD is currently generating about 0.16 per unit of volatility. If you would invest 961.00 in KOBE STEEL LTD on October 31, 2024 and sell it today you would earn a total of 38.00 from holding KOBE STEEL LTD or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. KOBE STEEL LTD
Performance |
| Timeline |
| PTT Global Chemical |
| KOBE STEEL LTD |
PTT Global and KOBE STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and KOBE STEEL
The main advantage of trading using opposite PTT Global and KOBE STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, KOBE STEEL 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 KOBE STEEL will offset losses from the drop in KOBE STEEL's long position.| PTT Global vs. ecotel communication ag | PTT Global vs. Discover Financial Services | PTT Global vs. MOBILE FACTORY INC | PTT Global vs. Verizon Communications |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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