Correlation Between PTT Public and TMT Steel
Can any of the company-specific risk be diversified away by investing in both PTT Public and TMT Steel 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 TMT Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and TMT Steel Public, you can compare the effects of market volatilities on PTT Public and TMT Steel 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 TMT Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and TMT Steel.
Diversification Opportunities for PTT Public and TMT Steel
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PTT and TMT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and TMT Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMT Steel 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 TMT Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMT Steel Public has no effect on the direction of PTT Public i.e., PTT Public and TMT Steel go up and down completely randomly.
Pair Corralation between PTT Public and TMT Steel
Assuming the 90 days trading horizon PTT Public is expected to generate 106.47 times less return on investment than TMT Steel. But when comparing it to its historical volatility, PTT Public is 52.46 times less risky than TMT Steel. It trades about 0.02 of its potential returns per unit of risk. TMT Steel Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 697.00 in TMT Steel Public on August 28, 2024 and sell it today you would lose (355.00) from holding TMT Steel Public or give up 50.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
PTT Public vs. TMT Steel Public
Performance |
| Timeline |
| PTT Public |
| TMT Steel Public |
PTT Public and TMT Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Public and TMT Steel
The main advantage of trading using opposite PTT Public and TMT Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, TMT Steel 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 TMT Steel will offset losses from the drop in TMT Steel'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 |
| TMT Steel vs. MCS Steel Public | TMT Steel vs. Thai Vegetable Oil | TMT Steel vs. Pacific Pipe Public | TMT Steel vs. Tipco Foods 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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