Correlation Between Goodyear Public and PTT Public
Can any of the company-specific risk be diversified away by investing in both Goodyear Public and PTT Public 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 Goodyear Public and PTT Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodyear Public and PTT Public, you can compare the effects of market volatilities on Goodyear Public and PTT Public 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 Goodyear Public with a short position of PTT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodyear Public and PTT Public.
Diversification Opportunities for Goodyear Public and PTT Public
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goodyear and PTT is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear Public and PTT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Public and Goodyear Public 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 Goodyear Public are associated (or correlated) with PTT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Public has no effect on the direction of Goodyear Public i.e., Goodyear Public and PTT Public go up and down completely randomly.
Pair Corralation between Goodyear Public and PTT Public
Assuming the 90 days trading horizon Goodyear Public is expected to generate 0.57 times more return on investment than PTT Public. However, Goodyear Public is 1.74 times less risky than PTT Public. It trades about -0.06 of its potential returns per unit of risk. PTT Public is currently generating about -0.08 per unit of risk. If you would invest 17,600 in Goodyear Public on November 2, 2024 and sell it today you would lose (200.00) from holding Goodyear Public or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goodyear Public vs. PTT Public
Performance |
| Timeline |
| Goodyear Public |
| PTT Public |
Goodyear Public and PTT Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodyear Public and PTT Public
The main advantage of trading using opposite Goodyear Public and PTT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Public position performs unexpectedly, PTT Public 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 PTT Public will offset losses from the drop in PTT Public's long position.| Goodyear Public vs. OHTL Public | Goodyear Public vs. LPN Development Public | Goodyear Public vs. The Erawan Group | Goodyear Public vs. MBK Public |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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