Correlation Between PTT Global and Thai Oil
Can any of the company-specific risk be diversified away by investing in both PTT Global and Thai Oil 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 Global and Thai Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Global Chemical and Thai Oil Public, you can compare the effects of market volatilities on PTT Global and Thai Oil 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 Global with a short position of Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Thai Oil.
Diversification Opportunities for PTT Global and Thai Oil
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PTT and Thai is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil Public and PTT Global 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 Global Chemical are associated (or correlated) with Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil Public has no effect on the direction of PTT Global i.e., PTT Global and Thai Oil go up and down completely randomly.
Pair Corralation between PTT Global and Thai Oil
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 27.59 times more return on investment than Thai Oil. However, PTT Global is 27.59 times more volatile than Thai Oil Public. It trades about 0.04 of its potential returns per unit of risk. Thai Oil Public is currently generating about -0.02 per unit of risk. If you would invest 4,512 in PTT Global Chemical on August 29, 2024 and sell it today you would lose (1,987) from holding PTT Global Chemical or give up 44.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
PTT Global Chemical vs. Thai Oil Public
Performance |
| Timeline |
| PTT Global Chemical |
| Thai Oil Public |
PTT Global and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and Thai Oil
The main advantage of trading using opposite PTT Global and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global position performs unexpectedly, Thai Oil 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 Oil will offset losses from the drop in Thai Oil's long position.The idea behind PTT Global Chemical and Thai Oil Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Thai Oil vs. Copperwired Public | Thai Oil vs. Winnergy Medical Public | Thai Oil vs. PINTHONG INDUSTRIAL PARK | Thai Oil vs. Digital Telecommunications Infrastructure |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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