Correlation Between PTT Global and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both PTT Global and Playa Hotels 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 Playa Hotels 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 Playa Hotels Resorts, you can compare the effects of market volatilities on PTT Global and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Playa Hotels.
Diversification Opportunities for PTT Global and Playa Hotels
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PTT and Playa is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of PTT Global i.e., PTT Global and Playa Hotels go up and down completely randomly.
Pair Corralation between PTT Global and Playa Hotels
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Playa Hotels. In addition to that, PTT Global is 1.91 times more volatile than Playa Hotels Resorts. It trades about -0.33 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about -0.05 per unit of volatility. If you would invest 1,210 in Playa Hotels Resorts on November 3, 2024 and sell it today you would lose (20.00) from holding Playa Hotels Resorts or give up 1.65% 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. Playa Hotels Resorts
Performance |
| Timeline |
| PTT Global Chemical |
| Playa Hotels Resorts |
PTT Global and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Playa Hotels
The main advantage of trading using opposite PTT Global and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| PTT Global vs. X FAB Silicon Foundries | PTT Global vs. STGEORGE MINING LTD | PTT Global vs. Globex Mining Enterprises | PTT Global vs. Harmony Gold Mining |
| Playa Hotels vs. UNITED RENTALS | Playa Hotels vs. LOANDEPOT INC A | Playa Hotels vs. Global Ship Lease | Playa Hotels vs. PATTIES FOODS |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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