Correlation Between Global Power and PTG Energy
Can any of the company-specific risk be diversified away by investing in both Global Power and PTG Energy 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 Global Power and PTG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Power Synergy and PTG Energy PCL, you can compare the effects of market volatilities on Global Power and PTG Energy 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 Global Power with a short position of PTG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Power and PTG Energy.
Diversification Opportunities for Global Power and PTG Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and PTG is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Global Power Synergy and PTG Energy PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTG Energy PCL and Global Power 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 Global Power Synergy are associated (or correlated) with PTG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTG Energy PCL has no effect on the direction of Global Power i.e., Global Power and PTG Energy go up and down completely randomly.
Pair Corralation between Global Power and PTG Energy
Assuming the 90 days trading horizon Global Power Synergy is expected to generate 0.92 times more return on investment than PTG Energy. However, Global Power Synergy is 1.09 times less risky than PTG Energy. It trades about -0.02 of its potential returns per unit of risk. PTG Energy PCL is currently generating about -0.22 per unit of risk. If you would invest 4,425 in Global Power Synergy on August 29, 2024 and sell it today you would lose (50.00) from holding Global Power Synergy or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Power Synergy vs. PTG Energy PCL
Performance |
| Timeline |
| Global Power Synergy |
| PTG Energy PCL |
Global Power and PTG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Power and PTG Energy
The main advantage of trading using opposite Global Power and PTG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Power position performs unexpectedly, PTG Energy 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 PTG Energy will offset losses from the drop in PTG Energy's long position.The idea behind Global Power Synergy and PTG Energy PCL 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.| PTG Energy vs. SCB X Public | PTG Energy vs. Kasikornbank Public | PTG Energy vs. PTT Public | PTG Energy vs. Kasikornbank 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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