Correlation Between PTT Public and North East
Can any of the company-specific risk be diversified away by investing in both PTT Public and North East 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 North East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and North East Rubbers, you can compare the effects of market volatilities on PTT Public and North East 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 North East. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and North East.
Diversification Opportunities for PTT Public and North East
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PTT and North is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and North East Rubbers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North East Rubbers 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 North East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North East Rubbers has no effect on the direction of PTT Public i.e., PTT Public and North East go up and down completely randomly.
Pair Corralation between PTT Public and North East
Assuming the 90 days trading horizon PTT Public is expected to under-perform the North East. But the stock apears to be less risky and, when comparing its historical volatility, PTT Public is 1.56 times less risky than North East. The stock trades about -0.04 of its potential returns per unit of risk. The North East Rubbers is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 488.00 in North East Rubbers on September 2, 2024 and sell it today you would lose (4.00) from holding North East Rubbers or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Public vs. North East Rubbers
Performance |
| Timeline |
| PTT Public |
| North East Rubbers |
PTT Public and North East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and North East
The main advantage of trading using opposite PTT Public and North East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, North East 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 North East will offset losses from the drop in North East'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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