Correlation Between PTG Energy and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both PTG Energy and Hwa Fong 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 Hwa Fong 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 Hwa Fong Rubber, you can compare the effects of market volatilities on PTG Energy and Hwa Fong 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 Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTG Energy and Hwa Fong.
Diversification Opportunities for PTG Energy and Hwa Fong
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PTG and Hwa is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding PTG Energy PCL and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber 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 Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of PTG Energy i.e., PTG Energy and Hwa Fong go up and down completely randomly.
Pair Corralation between PTG Energy and Hwa Fong
Assuming the 90 days trading horizon PTG Energy PCL is expected to under-perform the Hwa Fong. In addition to that, PTG Energy is 1.07 times more volatile than Hwa Fong Rubber. It trades about -0.43 of its total potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.2 per unit of volatility. If you would invest 430.00 in Hwa Fong Rubber on September 18, 2024 and sell it today you would lose (18.00) from holding Hwa Fong Rubber or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
PTG Energy PCL vs. Hwa Fong Rubber
Performance |
| Timeline |
| PTG Energy PCL |
| Hwa Fong Rubber |
PTG Energy and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTG Energy and Hwa Fong
The main advantage of trading using opposite PTG Energy and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTG Energy position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| PTG Energy vs. Hwa Fong Rubber | PTG Energy vs. AAPICO Hitech Public | PTG Energy vs. Haad Thip Public | PTG Energy vs. Italian Thai Development Public |
| Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Haad Thip Public | Hwa Fong vs. Italian Thai Development 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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