Correlation Between PTT Global and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both PTT Global and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on PTT Global and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and TRADEGATE.
Diversification Opportunities for PTT Global and TRADEGATE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PTT and TRADEGATE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of PTT Global i.e., PTT Global and TRADEGATE go up and down completely randomly.
Pair Corralation between PTT Global and TRADEGATE
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 21.29 times more return on investment than TRADEGATE. However, PTT Global is 21.29 times more volatile than TRADEGATE. It trades about 0.03 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.04 per unit of risk. If you would invest 106.00 in PTT Global Chemical on October 31, 2024 and sell it today you would lose (49.00) from holding PTT Global Chemical or give up 46.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Global Chemical vs. TRADEGATE
Performance |
| Timeline |
| PTT Global Chemical |
| TRADEGATE |
PTT Global and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and TRADEGATE
The main advantage of trading using opposite PTT Global and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE'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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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