Correlation Between PTT OIL and NSL Foods
Can any of the company-specific risk be diversified away by investing in both PTT OIL and NSL Foods 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 PTT OIL and NSL Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT OIL RETAIL and NSL Foods Public, you can compare the effects of market volatilities on PTT OIL and NSL Foods 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 PTT OIL with a short position of NSL Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT OIL and NSL Foods.
Diversification Opportunities for PTT OIL and NSL Foods
Very poor diversification
The 3 months correlation between PTT and NSL is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PTT OIL RETAIL and NSL Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSL Foods Public and PTT OIL 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 PTT OIL RETAIL are associated (or correlated) with NSL Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSL Foods Public has no effect on the direction of PTT OIL i.e., PTT OIL and NSL Foods go up and down completely randomly.
Pair Corralation between PTT OIL and NSL Foods
Assuming the 90 days trading horizon PTT OIL RETAIL is expected to generate 1.44 times more return on investment than NSL Foods. However, PTT OIL is 1.44 times more volatile than NSL Foods Public. It trades about 0.02 of its potential returns per unit of risk. NSL Foods Public is currently generating about -0.03 per unit of risk. If you would invest 1,148 in PTT OIL RETAIL on November 29, 2024 and sell it today you would earn a total of 2.00 from holding PTT OIL RETAIL or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
PTT OIL RETAIL vs. NSL Foods Public
Performance |
| Timeline |
| PTT OIL RETAIL |
| NSL Foods Public |
PTT OIL and NSL Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT OIL and NSL Foods
The main advantage of trading using opposite PTT OIL and NSL Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT OIL position performs unexpectedly, NSL Foods 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 NSL Foods will offset losses from the drop in NSL Foods' long position.| PTT OIL vs. Rich Sport Public | PTT OIL vs. Asia Metal Public | PTT OIL vs. Kiattana Transport Public | PTT OIL vs. NSL Foods 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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