Correlation Between PTT Public and Krungthai Card
Can any of the company-specific risk be diversified away by investing in both PTT Public and Krungthai Card 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 Krungthai Card into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and Krungthai Card PCL, you can compare the effects of market volatilities on PTT Public and Krungthai Card 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 Krungthai Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Krungthai Card.
Diversification Opportunities for PTT Public and Krungthai Card
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between PTT and Krungthai is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Krungthai Card PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krungthai Card PCL 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 Krungthai Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krungthai Card PCL has no effect on the direction of PTT Public i.e., PTT Public and Krungthai Card go up and down completely randomly.
Pair Corralation between PTT Public and Krungthai Card
Assuming the 90 days trading horizon PTT Public is expected to generate 17.39 times less return on investment than Krungthai Card. But when comparing it to its historical volatility, PTT Public is 1.16 times less risky than Krungthai Card. It trades about 0.01 of its potential returns per unit of risk. Krungthai Card PCL is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,325 in Krungthai Card PCL on August 28, 2024 and sell it today you would earn a total of 275.00 from holding Krungthai Card PCL or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Public vs. Krungthai Card PCL
Performance |
| Timeline |
| PTT Public |
| Krungthai Card PCL |
PTT Public and Krungthai Card Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and Krungthai Card
The main advantage of trading using opposite PTT Public and Krungthai Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, Krungthai Card 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 Krungthai Card will offset losses from the drop in Krungthai Card's long position.The idea behind PTT Public and Krungthai Card PCL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Krungthai Card vs. Thai Energy Storage | Krungthai Card vs. Royal Orchid Hotel | Krungthai Card vs. Grand Canal Land | Krungthai Card vs. PRG 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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