Correlation Between Thai Union and PTT Exploration
Can any of the company-specific risk be diversified away by investing in both Thai Union and PTT Exploration 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 Thai Union and PTT Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Union Group and PTT Exploration and, you can compare the effects of market volatilities on Thai Union and PTT Exploration 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 Thai Union with a short position of PTT Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and PTT Exploration.
Diversification Opportunities for Thai Union and PTT Exploration
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thai and PTT is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and PTT Exploration and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Exploration and Thai Union 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 Thai Union Group are associated (or correlated) with PTT Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Exploration has no effect on the direction of Thai Union i.e., Thai Union and PTT Exploration go up and down completely randomly.
Pair Corralation between Thai Union and PTT Exploration
Assuming the 90 days horizon Thai Union Group is expected to under-perform the PTT Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Thai Union Group is 1.11 times less risky than PTT Exploration. The stock trades about -0.28 of its potential returns per unit of risk. The PTT Exploration and is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12,550 in PTT Exploration and on August 24, 2024 and sell it today you would earn a total of 200.00 from holding PTT Exploration and or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thai Union Group vs. PTT Exploration and
Performance |
| Timeline |
| Thai Union Group |
| PTT Exploration |
Thai Union and PTT Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and PTT Exploration
The main advantage of trading using opposite Thai Union and PTT Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union position performs unexpectedly, PTT Exploration 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 Exploration will offset losses from the drop in PTT Exploration's long position.| Thai Union vs. CP ALL Public | Thai Union vs. Carabao Group Public | Thai Union vs. Minor International Public | Thai Union vs. Central Pattana Public |
| PTT Exploration vs. PTT Public | PTT Exploration vs. PTT Global Chemical | PTT Exploration vs. The Siam Cement | PTT Exploration vs. SCB X 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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