Correlation Between NSL Foods and PTT OIL
Can any of the company-specific risk be diversified away by investing in both NSL Foods and PTT OIL 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 NSL Foods and PTT OIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSL Foods Public and PTT OIL RETAIL, you can compare the effects of market volatilities on NSL Foods and PTT OIL 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 NSL Foods with a short position of PTT OIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSL Foods and PTT OIL.
Diversification Opportunities for NSL Foods and PTT OIL
Average diversification
The 3 months correlation between NSL and PTT is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NSL Foods Public and PTT OIL RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL RETAIL and NSL Foods 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 NSL Foods Public are associated (or correlated) with PTT OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL RETAIL has no effect on the direction of NSL Foods i.e., NSL Foods and PTT OIL go up and down completely randomly.
Pair Corralation between NSL Foods and PTT OIL
Assuming the 90 days trading horizon NSL Foods Public is expected to generate 0.32 times more return on investment than PTT OIL. However, NSL Foods Public is 3.11 times less risky than PTT OIL. It trades about -0.01 of its potential returns per unit of risk. PTT OIL RETAIL is currently generating about -0.23 per unit of risk. If you would invest 3,250 in NSL Foods Public on September 1, 2024 and sell it today you would lose (25.00) from holding NSL Foods Public or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NSL Foods Public vs. PTT OIL RETAIL
Performance |
| Timeline |
| NSL Foods Public |
| PTT OIL RETAIL |
NSL Foods and PTT OIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSL Foods and PTT OIL
The main advantage of trading using opposite NSL Foods and PTT OIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSL Foods position performs unexpectedly, PTT OIL 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 OIL will offset losses from the drop in PTT OIL's long position.| NSL Foods vs. Mega Lifesciences Public | NSL Foods vs. Com7 PCL | NSL Foods vs. Thai Union Group | NSL Foods vs. Jay Mart Public |
| PTT OIL vs. Star Petroleum Refining | PTT OIL vs. Power Solution Technologies | PTT OIL vs. Kingsmen CMTI Public | PTT OIL vs. Project Planning Service |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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