Correlation Between HITACHI CONSTRMACHADR/2 and PTT GLBL
Can any of the company-specific risk be diversified away by investing in both HITACHI CONSTRMACHADR/2 and PTT GLBL 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 CONSTRMACHADR/2 and PTT GLBL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HITACHI STRMACHADR2 and PTT GLBL CHEM NVDR , you can compare the effects of market volatilities on HITACHI CONSTRMACHADR/2 and PTT GLBL 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 CONSTRMACHADR/2 with a short position of PTT GLBL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HITACHI CONSTRMACHADR/2 and PTT GLBL.
Diversification Opportunities for HITACHI CONSTRMACHADR/2 and PTT GLBL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HITACHI and PTT is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding HITACHI STRMACHADR2 and PTT GLBL CHEM NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT GLBL CHEM and HITACHI CONSTRMACHADR/2 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 STRMACHADR2 are associated (or correlated) with PTT GLBL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT GLBL CHEM has no effect on the direction of HITACHI CONSTRMACHADR/2 i.e., HITACHI CONSTRMACHADR/2 and PTT GLBL go up and down completely randomly.
Pair Corralation between HITACHI CONSTRMACHADR/2 and PTT GLBL
Assuming the 90 days trading horizon HITACHI CONSTRMACHADR/2 is expected to generate 10.39 times less return on investment than PTT GLBL. But when comparing it to its historical volatility, HITACHI STRMACHADR2 is 6.22 times less risky than PTT GLBL. It trades about 0.02 of its potential returns per unit of risk. PTT GLBL CHEM NVDR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 100.00 in PTT GLBL CHEM NVDR on September 5, 2024 and sell it today you would lose (31.00) from holding PTT GLBL CHEM NVDR or give up 31.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HITACHI STRMACHADR2 vs. PTT GLBL CHEM NVDR
Performance |
| Timeline |
| HITACHI CONSTRMACHADR/2 |
| PTT GLBL CHEM |
HITACHI CONSTRMACHADR/2 and PTT GLBL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HITACHI CONSTRMACHADR/2 and PTT GLBL
The main advantage of trading using opposite HITACHI CONSTRMACHADR/2 and PTT GLBL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HITACHI CONSTRMACHADR/2 position performs unexpectedly, PTT GLBL 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 GLBL will offset losses from the drop in PTT GLBL's long position.| HITACHI CONSTRMACHADR/2 vs. NISSAN CHEMICAL IND | HITACHI CONSTRMACHADR/2 vs. WESTLAKE CHEMICAL | HITACHI CONSTRMACHADR/2 vs. Quaker Chemical | HITACHI CONSTRMACHADR/2 vs. Ming Le Sports |
| PTT GLBL vs. Singapore Airlines Limited | PTT GLBL vs. Adtalem Global Education | PTT GLBL vs. SPORT LISBOA E | PTT GLBL vs. EMBARK EDUCATION LTD |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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