Correlation Between PTT Global and NESTE OYJ
Can any of the company-specific risk be diversified away by investing in both PTT Global and NESTE OYJ 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 NESTE OYJ 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 NESTE OYJ UNSPADR, you can compare the effects of market volatilities on PTT Global and NESTE OYJ 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 NESTE OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and NESTE OYJ.
Diversification Opportunities for PTT Global and NESTE OYJ
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTT and NESTE is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and NESTE OYJ UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTE OYJ UNSPADR 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 NESTE OYJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTE OYJ UNSPADR has no effect on the direction of PTT Global i.e., PTT Global and NESTE OYJ go up and down completely randomly.
Pair Corralation between PTT Global and NESTE OYJ
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 0.96 times more return on investment than NESTE OYJ. However, PTT Global Chemical is 1.05 times less risky than NESTE OYJ. It trades about 0.08 of its potential returns per unit of risk. NESTE OYJ UNSPADR is currently generating about 0.06 per unit of risk. If you would invest 63.00 in PTT Global Chemical on September 13, 2024 and sell it today you would earn a total of 2.00 from holding PTT Global Chemical or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. NESTE OYJ UNSPADR
Performance |
| Timeline |
| PTT Global Chemical |
| NESTE OYJ UNSPADR |
PTT Global and NESTE OYJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and NESTE OYJ
The main advantage of trading using opposite PTT Global and NESTE OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, NESTE OYJ 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 NESTE OYJ will offset losses from the drop in NESTE OYJ's long position.The idea behind PTT Global Chemical and NESTE OYJ UNSPADR 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.| NESTE OYJ vs. Ultra Clean Holdings | NESTE OYJ vs. Mitsubishi Gas Chemical | NESTE OYJ vs. PTT Global Chemical | NESTE OYJ vs. Luckin Coffee |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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