Correlation Between PTT Oil and Power Solution
Can any of the company-specific risk be diversified away by investing in both PTT Oil and Power Solution 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 Power Solution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Oil and and Power Solution Technologies, you can compare the effects of market volatilities on PTT Oil and Power Solution 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 Power Solution. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Oil and Power Solution.
Diversification Opportunities for PTT Oil and Power Solution
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PTT and Power is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PTT Oil and and Power Solution Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Solution Techn 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 and are associated (or correlated) with Power Solution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Solution Techn has no effect on the direction of PTT Oil i.e., PTT Oil and Power Solution go up and down completely randomly.
Pair Corralation between PTT Oil and Power Solution
Assuming the 90 days horizon PTT Oil and is expected to under-perform the Power Solution. But the stock apears to be less risky and, when comparing its historical volatility, PTT Oil and is 32.58 times less risky than Power Solution. The stock trades about -0.06 of its potential returns per unit of risk. The Power Solution Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Power Solution Technologies on August 24, 2024 and sell it today you would lose (118.00) from holding Power Solution Technologies or give up 71.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
PTT Oil and vs. Power Solution Technologies
Performance |
| Timeline |
| PTT Oil |
| Power Solution Techn |
PTT Oil and Power Solution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Oil and Power Solution
The main advantage of trading using opposite PTT Oil and Power Solution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Oil position performs unexpectedly, Power Solution 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 Power Solution will offset losses from the drop in Power Solution's long position.| PTT Oil vs. PTT Public | PTT Oil vs. CP ALL Public | PTT Oil vs. Kasikornbank Public | PTT Oil vs. Airports of Thailand |
| Power Solution vs. WHA Public | Power Solution vs. Siri Prime Office | Power Solution vs. Ananda Development Public | Power Solution vs. Bangkok Land Public |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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