Correlation Between PTT Public and Nava Nakorn
Can any of the company-specific risk be diversified away by investing in both PTT Public and Nava Nakorn 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 Nava Nakorn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and Nava Nakorn Public, you can compare the effects of market volatilities on PTT Public and Nava Nakorn 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 Nava Nakorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Nava Nakorn.
Diversification Opportunities for PTT Public and Nava Nakorn
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTT and Nava is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Nava Nakorn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nava Nakorn Public 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 Nava Nakorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nava Nakorn Public has no effect on the direction of PTT Public i.e., PTT Public and Nava Nakorn go up and down completely randomly.
Pair Corralation between PTT Public and Nava Nakorn
Assuming the 90 days trading horizon PTT Public is expected to generate 0.69 times more return on investment than Nava Nakorn. However, PTT Public is 1.45 times less risky than Nava Nakorn. It trades about -0.11 of its potential returns per unit of risk. Nava Nakorn Public is currently generating about -0.18 per unit of risk. If you would invest 3,300 in PTT Public on September 13, 2024 and sell it today you would lose (75.00) from holding PTT Public or give up 2.27% 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. Nava Nakorn Public
Performance |
| Timeline |
| PTT Public |
| Nava Nakorn Public |
PTT Public and Nava Nakorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and Nava Nakorn
The main advantage of trading using opposite PTT Public and Nava Nakorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, Nava Nakorn 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 Nava Nakorn will offset losses from the drop in Nava Nakorn'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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