Correlation Between PTT Public and Tipco Foods
Can any of the company-specific risk be diversified away by investing in both PTT Public and Tipco Foods 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 Tipco Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and Tipco Foods Public, you can compare the effects of market volatilities on PTT Public and Tipco Foods 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 Tipco Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Tipco Foods.
Diversification Opportunities for PTT Public and Tipco Foods
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PTT and Tipco is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Tipco Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tipco Foods 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 Tipco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tipco Foods Public has no effect on the direction of PTT Public i.e., PTT Public and Tipco Foods go up and down completely randomly.
Pair Corralation between PTT Public and Tipco Foods
Assuming the 90 days trading horizon PTT Public is expected to under-perform the Tipco Foods. But the stock apears to be less risky and, when comparing its historical volatility, PTT Public is 64.21 times less risky than Tipco Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Tipco Foods Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 846.00 in Tipco Foods Public on September 4, 2024 and sell it today you would earn a total of 164.00 from holding Tipco Foods Public or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
PTT Public vs. Tipco Foods Public
Performance |
| Timeline |
| PTT Public |
| Tipco Foods Public |
PTT Public and Tipco Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and Tipco Foods
The main advantage of trading using opposite PTT Public and Tipco Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, Tipco Foods 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 Tipco Foods will offset losses from the drop in Tipco Foods' 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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