Correlation Between PTT Public and Kang Yong
Can any of the company-specific risk be diversified away by investing in both PTT Public and Kang Yong 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 Kang Yong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and Kang Yong Electric, you can compare the effects of market volatilities on PTT Public and Kang Yong 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 Kang Yong. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Kang Yong.
Diversification Opportunities for PTT Public and Kang Yong
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PTT and Kang is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Kang Yong Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kang Yong Electric 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 Kang Yong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kang Yong Electric has no effect on the direction of PTT Public i.e., PTT Public and Kang Yong go up and down completely randomly.
Pair Corralation between PTT Public and Kang Yong
Assuming the 90 days trading horizon PTT Public is expected to generate 55.33 times less return on investment than Kang Yong. But when comparing it to its historical volatility, PTT Public is 42.73 times less risky than Kang Yong. It trades about 0.03 of its potential returns per unit of risk. Kang Yong Electric is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 31,800 in Kang Yong Electric on August 28, 2024 and sell it today you would lose (2,900) from holding Kang Yong Electric or give up 9.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Public vs. Kang Yong Electric
Performance |
| Timeline |
| PTT Public |
| Kang Yong Electric |
PTT Public and Kang Yong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and Kang Yong
The main advantage of trading using opposite PTT Public and Kang Yong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, Kang Yong 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 Kang Yong will offset losses from the drop in Kang Yong's long position.The idea behind PTT Public and Kang Yong Electric 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.| Kang Yong vs. SCB X Public | Kang Yong vs. Kasikornbank Public | Kang Yong vs. PTT Public | Kang Yong vs. Kasikornbank 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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