Correlation Between PTT PCL and Eni SPA
Can any of the company-specific risk be diversified away by investing in both PTT PCL and Eni SPA 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 PCL and Eni SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT PCL ADR and Eni SpA ADR, you can compare the effects of market volatilities on PTT PCL and Eni SPA 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 PCL with a short position of Eni SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT PCL and Eni SPA.
Diversification Opportunities for PTT PCL and Eni SPA
Pay attention - limited upside
The 3 months correlation between PTT and Eni is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding PTT PCL ADR and Eni SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA ADR and PTT PCL 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 PCL ADR are associated (or correlated) with Eni SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eni SpA ADR has no effect on the direction of PTT PCL i.e., PTT PCL and Eni SPA go up and down completely randomly.
Pair Corralation between PTT PCL and Eni SPA
Assuming the 90 days horizon PTT PCL ADR is expected to generate 0.77 times more return on investment than Eni SPA. However, PTT PCL ADR is 1.3 times less risky than Eni SPA. It trades about 0.06 of its potential returns per unit of risk. Eni SpA ADR is currently generating about 0.03 per unit of risk. If you would invest 433.00 in PTT PCL ADR on August 28, 2024 and sell it today you would earn a total of 89.00 from holding PTT PCL ADR or generate 20.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
PTT PCL ADR vs. Eni SpA ADR
Performance |
| Timeline |
| PTT PCL ADR |
| Eni SpA ADR |
PTT PCL and Eni SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT PCL and Eni SPA
The main advantage of trading using opposite PTT PCL and Eni SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT PCL position performs unexpectedly, Eni SPA 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 Eni SPA will offset losses from the drop in Eni SPA's long position.The idea behind PTT PCL ADR and Eni SpA ADR 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.| Eni SPA vs. TotalEnergies SE ADR | Eni SPA vs. Ecopetrol SA ADR | Eni SPA vs. Shell PLC ADR | Eni SPA vs. Petroleo Brasileiro Petrobras |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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