Correlation Between PTT Exploration and Eastern Polymer
Can any of the company-specific risk be diversified away by investing in both PTT Exploration and Eastern Polymer 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 Eastern Polymer 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 Eastern Polymer Group, you can compare the effects of market volatilities on PTT Exploration and Eastern Polymer 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 Eastern Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Exploration and Eastern Polymer.
Diversification Opportunities for PTT Exploration and Eastern Polymer
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PTT and Eastern is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and Eastern Polymer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Polymer Group 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 Eastern Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Polymer Group has no effect on the direction of PTT Exploration i.e., PTT Exploration and Eastern Polymer go up and down completely randomly.
Pair Corralation between PTT Exploration and Eastern Polymer
Assuming the 90 days trading horizon PTT Exploration and is expected to generate 0.56 times more return on investment than Eastern Polymer. However, PTT Exploration and is 1.79 times less risky than Eastern Polymer. It trades about -0.1 of its potential returns per unit of risk. Eastern Polymer Group is currently generating about -0.07 per unit of risk. If you would invest 13,800 in PTT Exploration and on September 12, 2024 and sell it today you would lose (1,300) from holding PTT Exploration and or give up 9.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
PTT Exploration and vs. Eastern Polymer Group
Performance |
| Timeline |
| PTT Exploration |
| Eastern Polymer Group |
PTT Exploration and Eastern Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Exploration and Eastern Polymer
The main advantage of trading using opposite PTT Exploration and Eastern Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Exploration position performs unexpectedly, Eastern Polymer 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 Eastern Polymer will offset losses from the drop in Eastern Polymer's long position.| PTT Exploration vs. Bangchak Public | PTT Exploration vs. IRPC Public | PTT Exploration vs. Star Petroleum Refining | PTT Exploration vs. PTG Energy PCL |
| Eastern Polymer vs. AP Public | Eastern Polymer vs. CK Power Public | Eastern Polymer vs. Gunkul Engineering Public | Eastern Polymer vs. Indorama Ventures PCL |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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