Correlation Between PTT Public and CP ALL
Can any of the company-specific risk be diversified away by investing in both PTT Public and CP ALL 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 CP ALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and CP ALL Public, you can compare the effects of market volatilities on PTT Public and CP ALL 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 CP ALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and CP ALL.
Diversification Opportunities for PTT Public and CP ALL
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PTT and CPALL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL 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 CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of PTT Public i.e., PTT Public and CP ALL go up and down completely randomly.
Pair Corralation between PTT Public and CP ALL
Assuming the 90 days trading horizon PTT Public is expected to generate 10.84 times less return on investment than CP ALL. But when comparing it to its historical volatility, PTT Public is 1.37 times less risky than CP ALL. It trades about 0.01 of its potential returns per unit of risk. CP ALL Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,381 in CP ALL Public on August 24, 2024 and sell it today you would earn a total of 1,019 from holding CP ALL Public or generate 18.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Public vs. CP ALL Public
Performance |
| Timeline |
| PTT Public |
| CP ALL Public |
PTT Public and CP ALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and CP ALL
The main advantage of trading using opposite PTT Public and CP ALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, CP ALL 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 CP ALL will offset losses from the drop in CP ALL's long position.| PTT Public vs. IRPC Public | PTT Public vs. PTT Oil and | PTT Public vs. Power Solution Technologies | PTT Public vs. Star Petroleum Refining |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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