Correlation Between Nufarm and PTT Global
Can any of the company-specific risk be diversified away by investing in both Nufarm 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 Nufarm and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm Limited and PTT Global Chemical, you can compare the effects of market volatilities on Nufarm 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 Nufarm with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm and PTT Global.
Diversification Opportunities for Nufarm and PTT Global
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nufarm and PTT is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Limited 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 Nufarm 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 Nufarm Limited 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 Nufarm i.e., Nufarm and PTT Global go up and down completely randomly.
Pair Corralation between Nufarm and PTT Global
Assuming the 90 days horizon Nufarm Limited is expected to generate 0.72 times more return on investment than PTT Global. However, Nufarm Limited is 1.4 times less risky than PTT Global. It trades about 0.23 of its potential returns per unit of risk. PTT Global Chemical is currently generating about 0.12 per unit of risk. If you would invest 222.00 in Nufarm Limited on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Nufarm Limited or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Limited vs. PTT Global Chemical
Performance |
| Timeline |
| Nufarm Limited |
| PTT Global Chemical |
Nufarm and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm and PTT Global
The main advantage of trading using opposite Nufarm and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm 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.| Nufarm vs. ADRIATIC METALS LS 013355 | Nufarm vs. Playa Hotels Resorts | Nufarm vs. InterContinental Hotels Group | Nufarm vs. Hyatt Hotels |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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