Correlation Between Sterling Construction and PTT Global
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and PTT Global 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 Sterling Construction and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and PTT Global Chemical, you can compare the effects of market volatilities on Sterling Construction and PTT Global 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 Sterling Construction with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and PTT Global.
Diversification Opportunities for Sterling Construction and PTT Global
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and PTT is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical and Sterling Construction 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 Sterling Construction are associated (or correlated) with PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of Sterling Construction i.e., Sterling Construction and PTT Global go up and down completely randomly.
Pair Corralation between Sterling Construction and PTT Global
Assuming the 90 days horizon Sterling Construction is expected to generate 1.44 times less return on investment than PTT Global. But when comparing it to its historical volatility, Sterling Construction is 5.7 times less risky than PTT Global. It trades about 0.13 of its potential returns per unit of risk. PTT Global Chemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 108.00 in PTT Global Chemical on October 12, 2024 and sell it today you would lose (46.00) from holding PTT Global Chemical or give up 42.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sterling Construction vs. PTT Global Chemical
Performance |
| Timeline |
| Sterling Construction |
| PTT Global Chemical |
Sterling Construction and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and PTT Global
The main advantage of trading using opposite Sterling Construction and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, PTT Global 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 Global will offset losses from the drop in PTT Global's long position.| Sterling Construction vs. CanSino Biologics | Sterling Construction vs. Commercial Vehicle Group | Sterling Construction vs. Geely Automobile Holdings | Sterling Construction vs. Grupo Carso SAB |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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