Correlation Between PTT GLBL and SCG PACKAGING
Can any of the company-specific risk be diversified away by investing in both PTT GLBL and SCG PACKAGING 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 GLBL and SCG PACKAGING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT GLBL CHEM NVDR and SCG PACKAGING FGN , you can compare the effects of market volatilities on PTT GLBL and SCG PACKAGING 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 GLBL with a short position of SCG PACKAGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT GLBL and SCG PACKAGING.
Diversification Opportunities for PTT GLBL and SCG PACKAGING
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PTT and SCG is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PTT GLBL CHEM NVDR and SCG PACKAGING FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG PACKAGING FGN and PTT GLBL 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 GLBL CHEM NVDR are associated (or correlated) with SCG PACKAGING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG PACKAGING FGN has no effect on the direction of PTT GLBL i.e., PTT GLBL and SCG PACKAGING go up and down completely randomly.
Pair Corralation between PTT GLBL and SCG PACKAGING
Assuming the 90 days trading horizon PTT GLBL CHEM NVDR is expected to generate 2.96 times more return on investment than SCG PACKAGING. However, PTT GLBL is 2.96 times more volatile than SCG PACKAGING FGN . It trades about 0.03 of its potential returns per unit of risk. SCG PACKAGING FGN is currently generating about 0.04 per unit of risk. If you would invest 100.00 in PTT GLBL CHEM NVDR on September 4, 2024 and sell it today you would lose (32.00) from holding PTT GLBL CHEM NVDR or give up 32.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
PTT GLBL CHEM NVDR vs. SCG PACKAGING FGN
Performance |
| Timeline |
| PTT GLBL CHEM |
| SCG PACKAGING FGN |
PTT GLBL and SCG PACKAGING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT GLBL and SCG PACKAGING
The main advantage of trading using opposite PTT GLBL and SCG PACKAGING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT GLBL position performs unexpectedly, SCG PACKAGING 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 SCG PACKAGING will offset losses from the drop in SCG PACKAGING's long position.The idea behind PTT GLBL CHEM NVDR and SCG PACKAGING FGN 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.| SCG PACKAGING vs. Indorama Ventures PCL | SCG PACKAGING vs. PTT GLBL CHEM NVDR | SCG PACKAGING vs. Intouch Holdings Public | SCG PACKAGING vs. Bangkok Bank Public |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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