Correlation Between PTT Oil and Star Petroleum
Can any of the company-specific risk be diversified away by investing in both PTT Oil and Star Petroleum 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 Star Petroleum 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 Star Petroleum Refining, you can compare the effects of market volatilities on PTT Oil and Star Petroleum 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 Star Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Oil and Star Petroleum.
Diversification Opportunities for PTT Oil and Star Petroleum
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTT and Star is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PTT Oil and and Star Petroleum Refining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Petroleum Refining 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 Star Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Petroleum Refining has no effect on the direction of PTT Oil i.e., PTT Oil and Star Petroleum go up and down completely randomly.
Pair Corralation between PTT Oil and Star Petroleum
Assuming the 90 days horizon PTT Oil and is expected to generate 0.79 times more return on investment than Star Petroleum. However, PTT Oil and is 1.27 times less risky than Star Petroleum. It trades about -0.24 of its potential returns per unit of risk. Star Petroleum Refining is currently generating about -0.33 per unit of risk. If you would invest 1,300 in PTT Oil and on November 2, 2024 and sell it today you would lose (120.00) from holding PTT Oil and or give up 9.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PTT Oil and vs. Star Petroleum Refining
Performance |
| Timeline |
| PTT Oil |
| Star Petroleum Refining |
PTT Oil and Star Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Oil and Star Petroleum
The main advantage of trading using opposite PTT Oil and Star Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Oil position performs unexpectedly, Star Petroleum 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 Star Petroleum will offset losses from the drop in Star Petroleum'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 |
| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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