Correlation Between PTT Global and MOTOROLA SOLTN
Can any of the company-specific risk be diversified away by investing in both PTT Global and MOTOROLA SOLTN 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 MOTOROLA SOLTN 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 MOTOROLA SOLTN , you can compare the effects of market volatilities on PTT Global and MOTOROLA SOLTN 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 MOTOROLA SOLTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and MOTOROLA SOLTN.
Diversification Opportunities for PTT Global and MOTOROLA SOLTN
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTT and MOTOROLA is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and MOTOROLA SOLTN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOTOROLA SOLTN 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 MOTOROLA SOLTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOTOROLA SOLTN has no effect on the direction of PTT Global i.e., PTT Global and MOTOROLA SOLTN go up and down completely randomly.
Pair Corralation between PTT Global and MOTOROLA SOLTN
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the MOTOROLA SOLTN. In addition to that, PTT Global is 1.23 times more volatile than MOTOROLA SOLTN . It trades about -0.09 of its total potential returns per unit of risk. MOTOROLA SOLTN is currently generating about 0.24 per unit of volatility. If you would invest 42,150 in MOTOROLA SOLTN on September 5, 2024 and sell it today you would earn a total of 4,940 from holding MOTOROLA SOLTN or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. MOTOROLA SOLTN
Performance |
| Timeline |
| PTT Global Chemical |
| MOTOROLA SOLTN |
PTT Global and MOTOROLA SOLTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and MOTOROLA SOLTN
The main advantage of trading using opposite PTT Global and MOTOROLA SOLTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, MOTOROLA SOLTN 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 MOTOROLA SOLTN will offset losses from the drop in MOTOROLA SOLTN's long position.The idea behind PTT Global Chemical and MOTOROLA SOLTN 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.| MOTOROLA SOLTN vs. WESTLAKE CHEMICAL | MOTOROLA SOLTN vs. International Consolidated Airlines | MOTOROLA SOLTN vs. Singapore Airlines Limited | MOTOROLA SOLTN vs. PTT Global Chemical |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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