Correlation Between PTT Exploration and Diamond Building
Can any of the company-specific risk be diversified away by investing in both PTT Exploration and Diamond Building 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 Exploration and Diamond Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Exploration and and Diamond Building Products, you can compare the effects of market volatilities on PTT Exploration and Diamond Building 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 Exploration with a short position of Diamond Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Exploration and Diamond Building.
Diversification Opportunities for PTT Exploration and Diamond Building
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PTT and Diamond is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and Diamond Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Building Products and PTT Exploration 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 Exploration and are associated (or correlated) with Diamond Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Building Products has no effect on the direction of PTT Exploration i.e., PTT Exploration and Diamond Building go up and down completely randomly.
Pair Corralation between PTT Exploration and Diamond Building
Assuming the 90 days trading horizon PTT Exploration and is expected to under-perform the Diamond Building. In addition to that, PTT Exploration is 2.29 times more volatile than Diamond Building Products. It trades about -0.12 of its total potential returns per unit of risk. Diamond Building Products is currently generating about -0.04 per unit of volatility. If you would invest 784.00 in Diamond Building Products on August 29, 2024 and sell it today you would lose (14.00) from holding Diamond Building Products or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
PTT Exploration and vs. Diamond Building Products
Performance |
| Timeline |
| PTT Exploration |
| Diamond Building Products |
PTT Exploration and Diamond Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Exploration and Diamond Building
The main advantage of trading using opposite PTT Exploration and Diamond Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Exploration position performs unexpectedly, Diamond Building 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 Diamond Building will offset losses from the drop in Diamond Building's long position.| PTT Exploration vs. PTT Public | PTT Exploration vs. PTT Global Chemical | PTT Exploration vs. The Siam Cement | PTT Exploration vs. SCB X Public |
| Diamond Building vs. 2S Metal Public | Diamond Building vs. AAPICO Hitech Public | Diamond Building vs. AJ Plast 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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