Correlation Between Star Petroleum and PTG Energy
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and PTG 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 Star Petroleum and PTG Energy 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 PTG Energy PCL, you can compare the effects of market volatilities on Star Petroleum and PTG 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 Star Petroleum with a short position of PTG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and PTG Energy.
Diversification Opportunities for Star Petroleum and PTG Energy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Star and PTG is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and PTG Energy PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTG Energy PCL 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 PTG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTG Energy PCL has no effect on the direction of Star Petroleum i.e., Star Petroleum and PTG Energy go up and down completely randomly.
Pair Corralation between Star Petroleum and PTG Energy
Assuming the 90 days trading horizon Star Petroleum Refining is expected to generate 1.29 times more return on investment than PTG Energy. However, Star Petroleum is 1.29 times more volatile than PTG Energy PCL. It trades about 0.08 of its potential returns per unit of risk. PTG Energy PCL is currently generating about -0.2 per unit of risk. If you would invest 655.00 in Star Petroleum Refining on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Star Petroleum Refining or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. PTG Energy PCL
Performance |
| Timeline |
| Star Petroleum Refining |
| PTG Energy PCL |
Star Petroleum and PTG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and PTG Energy
The main advantage of trading using opposite Star Petroleum and PTG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, PTG 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 PTG Energy will offset losses from the drop in PTG Energy's long position.| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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