Correlation Between Waste Management and PTT Global
Can any of the company-specific risk be diversified away by investing in both Waste Management 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 Waste Management and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and PTT Global Chemical, you can compare the effects of market volatilities on Waste Management 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 Waste Management with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and PTT Global.
Diversification Opportunities for Waste Management and PTT Global
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Waste and PTT is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management 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 Waste Management 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 Waste Management 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 Waste Management i.e., Waste Management and PTT Global go up and down completely randomly.
Pair Corralation between Waste Management and PTT Global
Assuming the 90 days trading horizon Waste Management is expected to under-perform the PTT Global. But the stock apears to be less risky and, when comparing its historical volatility, Waste Management is 2.06 times less risky than PTT Global. The stock trades about -0.12 of its potential returns per unit of risk. The PTT Global Chemical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 63.00 in PTT Global Chemical on September 13, 2024 and sell it today you would earn a total of 2.00 from holding PTT Global Chemical or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Management vs. PTT Global Chemical
Performance |
| Timeline |
| Waste Management |
| PTT Global Chemical |
Waste Management and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Management and PTT Global
The main advantage of trading using opposite Waste Management and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management 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.| Waste Management vs. Apple Inc | Waste Management vs. Apple Inc | Waste Management vs. Apple Inc | Waste Management vs. Apple Inc |
| PTT Global vs. Cleanaway Waste Management | PTT Global vs. Sims Metal Management | PTT Global vs. Jupiter Fund Management | PTT Global vs. T MOBILE US |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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