Correlation Between PTT Public and Eastern Polymer
Can any of the company-specific risk be diversified away by investing in both PTT Public and Eastern Polymer 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 Public and Eastern Polymer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and Eastern Polymer Group, you can compare the effects of market volatilities on PTT Public and Eastern Polymer 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 Public with a short position of Eastern Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Eastern Polymer.
Diversification Opportunities for PTT Public and Eastern Polymer
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTT and Eastern is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Eastern Polymer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Polymer Group and PTT Public 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 Public are associated (or correlated) with Eastern Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Polymer Group has no effect on the direction of PTT Public i.e., PTT Public and Eastern Polymer go up and down completely randomly.
Pair Corralation between PTT Public and Eastern Polymer
Assuming the 90 days trading horizon PTT Public is expected to generate 0.3 times more return on investment than Eastern Polymer. However, PTT Public is 3.36 times less risky than Eastern Polymer. It trades about -0.14 of its potential returns per unit of risk. Eastern Polymer Group is currently generating about -0.13 per unit of risk. If you would invest 3,275 in PTT Public on September 14, 2024 and sell it today you would lose (100.00) from holding PTT Public or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Public vs. Eastern Polymer Group
Performance |
| Timeline |
| PTT Public |
| Eastern Polymer Group |
PTT Public and Eastern Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and Eastern Polymer
The main advantage of trading using opposite PTT Public and Eastern Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, Eastern Polymer 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 Eastern Polymer will offset losses from the drop in Eastern Polymer's long position.| PTT Public vs. PTT Exploration and | PTT Public vs. The Siam Cement | PTT Public vs. CP ALL Public | PTT Public vs. Airports of Thailand |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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