Correlation Between PTT Global and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both PTT Global and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on PTT Global and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and STORE ELECTRONIC.
Diversification Opportunities for PTT Global and STORE ELECTRONIC
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTT and STORE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of PTT Global i.e., PTT Global and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between PTT Global and STORE ELECTRONIC
Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the STORE ELECTRONIC. In addition to that, PTT Global is 1.49 times more volatile than STORE ELECTRONIC. It trades about -0.04 of its total potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.0 per unit of volatility. If you would invest 15,106 in STORE ELECTRONIC on September 3, 2024 and sell it today you would lose (1,086) from holding STORE ELECTRONIC or give up 7.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. STORE ELECTRONIC
Performance |
| Timeline |
| PTT Global Chemical |
| STORE ELECTRONIC |
PTT Global and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and STORE ELECTRONIC
The main advantage of trading using opposite PTT Global and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| PTT Global vs. Tianjin Capital Environmental | PTT Global vs. MITSUBISHI STEEL MFG | PTT Global vs. Playtech plc | PTT Global vs. Khiron Life Sciences |
| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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