Correlation Between President Automobile and PTT OIL
Can any of the company-specific risk be diversified away by investing in both President Automobile 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 President Automobile and PTT OIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between President Automobile Industries and PTT OIL RETAIL, you can compare the effects of market volatilities on President Automobile 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 President Automobile with a short position of PTT OIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of President Automobile and PTT OIL.
Diversification Opportunities for President Automobile and PTT OIL
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between President and PTT is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding President Automobile Industrie 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 President Automobile 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 President Automobile Industries 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 President Automobile i.e., President Automobile and PTT OIL go up and down completely randomly.
Pair Corralation between President Automobile and PTT OIL
Assuming the 90 days trading horizon President Automobile Industries is expected to under-perform the PTT OIL. In addition to that, President Automobile is 1.01 times more volatile than PTT OIL RETAIL. It trades about -0.07 of its total potential returns per unit of risk. PTT OIL RETAIL is currently generating about -0.05 per unit of volatility. If you would invest 2,315 in PTT OIL RETAIL on September 5, 2024 and sell it today you would lose (885.00) from holding PTT OIL RETAIL or give up 38.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
President Automobile Industrie vs. PTT OIL RETAIL
Performance |
| Timeline |
| President Automobile |
| PTT OIL RETAIL |
President Automobile and PTT OIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with President Automobile and PTT OIL
The main advantage of trading using opposite President Automobile and PTT OIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if President Automobile 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.| President Automobile vs. PTT Oil and | President Automobile vs. The Erawan Group | President Automobile vs. Autocorp Holding Public | President Automobile vs. XSpring Capital Public |
| PTT OIL vs. Tipco Foods Public | PTT OIL vs. NSL Foods Public | PTT OIL vs. President Automobile Industries | PTT OIL vs. Bumrungrad Hospital 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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