Correlation Between Hitachi Construction and PTT Global
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and PTT Global 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 Hitachi Construction and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Construction Machinery and PTT Global Chemical, you can compare the effects of market volatilities on Hitachi Construction and PTT Global 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 Hitachi Construction with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and PTT Global.
Diversification Opportunities for Hitachi Construction and PTT Global
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hitachi and PTT is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical and Hitachi Construction 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 Hitachi Construction Machinery are associated (or correlated) with PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and PTT Global go up and down completely randomly.
Pair Corralation between Hitachi Construction and PTT Global
Assuming the 90 days horizon Hitachi Construction is expected to generate 1.42 times less return on investment than PTT Global. But when comparing it to its historical volatility, Hitachi Construction Machinery is 1.28 times less risky than PTT Global. It trades about 0.1 of its potential returns per unit of risk. PTT Global Chemical is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 62.00 in PTT Global Chemical on August 28, 2024 and sell it today you would earn a total of 4.00 from holding PTT Global Chemical or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. PTT Global Chemical
Performance |
| Timeline |
| Hitachi Construction |
| PTT Global Chemical |
Hitachi Construction and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and PTT Global
The main advantage of trading using opposite Hitachi Construction and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, PTT Global 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 Global will offset losses from the drop in PTT Global's long position.| Hitachi Construction vs. Superior Plus Corp | Hitachi Construction vs. NMI Holdings | Hitachi Construction vs. Origin Agritech | Hitachi Construction vs. SIVERS SEMICONDUCTORS AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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