Correlation Between PTG Energy and Energy Absolute
Can any of the company-specific risk be diversified away by investing in both PTG Energy and Energy Absolute 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 PTG Energy and Energy Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTG Energy PCL and Energy Absolute Public, you can compare the effects of market volatilities on PTG Energy and Energy Absolute 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 PTG Energy with a short position of Energy Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTG Energy and Energy Absolute.
Diversification Opportunities for PTG Energy and Energy Absolute
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PTG and Energy is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding PTG Energy PCL and Energy Absolute Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Absolute Public and PTG Energy 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 PTG Energy PCL are associated (or correlated) with Energy Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Absolute Public has no effect on the direction of PTG Energy i.e., PTG Energy and Energy Absolute go up and down completely randomly.
Pair Corralation between PTG Energy and Energy Absolute
Assuming the 90 days trading horizon PTG Energy PCL is expected to under-perform the Energy Absolute. But the stock apears to be less risky and, when comparing its historical volatility, PTG Energy PCL is 3.09 times less risky than Energy Absolute. The stock trades about -0.07 of its potential returns per unit of risk. The Energy Absolute Public is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 356.00 in Energy Absolute Public on October 7, 2024 and sell it today you would earn a total of 40.00 from holding Energy Absolute Public or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTG Energy PCL vs. Energy Absolute Public
Performance |
| Timeline |
| PTG Energy PCL |
| Energy Absolute Public |
PTG Energy and Energy Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTG Energy and Energy Absolute
The main advantage of trading using opposite PTG Energy and Energy Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTG Energy position performs unexpectedly, Energy Absolute 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 Energy Absolute will offset losses from the drop in Energy Absolute's long position.| PTG Energy vs. Haad Thip Public | PTG Energy vs. AAPICO Hitech Public | PTG Energy vs. Inoue Rubber Public | PTG Energy vs. Hana Microelectronics Public |
| Energy Absolute vs. Delta Electronics Public | Energy Absolute vs. The Siam Cement | Energy Absolute vs. Advanced Info Service | Energy Absolute vs. Electricity Generating 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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