Correlation Between PTT Public and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both PTT Public and Charoen Pokphand 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 Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and Charoen Pokphand Foods, you can compare the effects of market volatilities on PTT Public and Charoen Pokphand 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 Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Charoen Pokphand.
Diversification Opportunities for PTT Public and Charoen Pokphand
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PTT and Charoen is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Charoen Pokphand Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Foods 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 Charoen Pokphand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charoen Pokphand Foods has no effect on the direction of PTT Public i.e., PTT Public and Charoen Pokphand go up and down completely randomly.
Pair Corralation between PTT Public and Charoen Pokphand
Assuming the 90 days trading horizon PTT Public is expected to generate 1.0 times more return on investment than Charoen Pokphand. However, PTT Public is 1.0 times less risky than Charoen Pokphand. It trades about 0.03 of its potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.13 per unit of risk. If you would invest 3,350 in PTT Public on August 25, 2024 and sell it today you would earn a total of 25.00 from holding PTT Public or generate 0.75% 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. Charoen Pokphand Foods
Performance |
| Timeline |
| PTT Public |
| Charoen Pokphand Foods |
PTT Public and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and Charoen Pokphand
The main advantage of trading using opposite PTT Public and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, Charoen Pokphand 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 Charoen Pokphand will offset losses from the drop in Charoen Pokphand's long position.| PTT Public vs. PTT Oil and | PTT Public vs. Power Solution Technologies | PTT Public vs. Star Petroleum Refining | PTT Public vs. Prima Marine Public |
| Charoen Pokphand vs. CP ALL Public | Charoen Pokphand vs. Carabao Group Public | Charoen Pokphand vs. Thai Union Group | Charoen Pokphand vs. Minor International 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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