Correlation Between PTT Exploration and Thai Union
Can any of the company-specific risk be diversified away by investing in both PTT Exploration and Thai Union 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 Thai Union 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 Thai Union Group, you can compare the effects of market volatilities on PTT Exploration and Thai Union 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 Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Exploration and Thai Union.
Diversification Opportunities for PTT Exploration and Thai Union
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PTT and Thai is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of PTT Exploration i.e., PTT Exploration and Thai Union go up and down completely randomly.
Pair Corralation between PTT Exploration and Thai Union
Assuming the 90 days trading horizon PTT Exploration and is expected to under-perform the Thai Union. But the stock apears to be less risky and, when comparing its historical volatility, PTT Exploration and is 48.75 times less risky than Thai Union. The stock trades about -0.03 of its potential returns per unit of risk. The Thai Union Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,419 in Thai Union Group on August 24, 2024 and sell it today you would lose (39.00) from holding Thai Union Group or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
PTT Exploration and vs. Thai Union Group
Performance |
| Timeline |
| PTT Exploration |
| Thai Union Group |
PTT Exploration and Thai Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Exploration and Thai Union
The main advantage of trading using opposite PTT Exploration and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Exploration position performs unexpectedly, Thai Union 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 Thai Union will offset losses from the drop in Thai Union'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 |
| Thai Union vs. CP ALL Public | Thai Union vs. Carabao Group Public | Thai Union vs. Minor International Public | Thai Union vs. Central Pattana 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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