Correlation Between PTT Exploration and Sakol Energy
Can any of the company-specific risk be diversified away by investing in both PTT Exploration and Sakol Energy 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 Sakol Energy 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 Sakol Energy Public, you can compare the effects of market volatilities on PTT Exploration and Sakol Energy 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 Sakol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Exploration and Sakol Energy.
Diversification Opportunities for PTT Exploration and Sakol Energy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTT and Sakol is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and Sakol Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sakol Energy Public 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 Sakol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sakol Energy Public has no effect on the direction of PTT Exploration i.e., PTT Exploration and Sakol Energy go up and down completely randomly.
Pair Corralation between PTT Exploration and Sakol Energy
Assuming the 90 days trading horizon PTT Exploration and is expected to under-perform the Sakol Energy. But the stock apears to be less risky and, when comparing its historical volatility, PTT Exploration and is 2.39 times less risky than Sakol Energy. The stock trades about -0.3 of its potential returns per unit of risk. The Sakol Energy Public is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Sakol Energy Public on September 20, 2024 and sell it today you would lose (2.00) from holding Sakol Energy Public or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PTT Exploration and vs. Sakol Energy Public
Performance |
| Timeline |
| PTT Exploration |
| Sakol Energy Public |
PTT Exploration and Sakol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Exploration and Sakol Energy
The main advantage of trading using opposite PTT Exploration and Sakol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Exploration position performs unexpectedly, Sakol Energy 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 Sakol Energy will offset losses from the drop in Sakol Energy's long position.| PTT Exploration vs. Bangchak Public | PTT Exploration vs. IRPC Public | PTT Exploration vs. PTG Energy PCL |
| Sakol Energy vs. Bangchak Public | Sakol Energy vs. IRPC Public | Sakol Energy vs. PTT Exploration and | Sakol Energy vs. PTG Energy 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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