Correlation Between Star Petroleum and PTT OIL
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and PTT 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 Star Petroleum and PTT OIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Petroleum Refining and PTT OIL RETAIL, you can compare the effects of market volatilities on Star Petroleum and PTT 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 Star Petroleum with a short position of PTT OIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and PTT OIL.
Diversification Opportunities for Star Petroleum and PTT OIL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Star and PTT is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and PTT OIL RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL RETAIL and Star Petroleum 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 Star Petroleum Refining are associated (or correlated) with PTT OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL RETAIL has no effect on the direction of Star Petroleum i.e., Star Petroleum and PTT OIL go up and down completely randomly.
Pair Corralation between Star Petroleum and PTT OIL
Assuming the 90 days trading horizon Star Petroleum Refining is expected to generate 0.37 times more return on investment than PTT OIL. However, Star Petroleum Refining is 2.73 times less risky than PTT OIL. It trades about 0.04 of its potential returns per unit of risk. PTT OIL RETAIL is currently generating about -0.23 per unit of risk. If you would invest 670.00 in Star Petroleum Refining on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Star Petroleum Refining or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. PTT OIL RETAIL
Performance |
| Timeline |
| Star Petroleum Refining |
| PTT OIL RETAIL |
Star Petroleum and PTT OIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and PTT OIL
The main advantage of trading using opposite Star Petroleum and PTT OIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, PTT 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 PTT OIL will offset losses from the drop in PTT OIL's long position.| Star Petroleum vs. Sawang Export Public | Star Petroleum vs. Quality Houses Hotel | Star Petroleum vs. Grande Hospitality Real | Star Petroleum vs. City Steel Public |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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