Correlation Between Citizens Financial and PTT Global

Can any of the company-specific risk be diversified away by investing in both Citizens Financial 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 Citizens Financial and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Financial Group and PTT Global Chemical, you can compare the effects of market volatilities on Citizens Financial 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 Citizens Financial with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Financial and PTT Global.

Diversification Opportunities for Citizens Financial and PTT Global

-0.57

Correlation Coefficient

Citizens Financial  PTT Global

Excellent diversification

The 3 months correlation between Citizens and PTT is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Financial Group 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 Citizens Financial 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 Citizens Financial Group 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 Citizens Financial i.e., Citizens Financial and PTT Global go up and down completely randomly.

Pair Corralation between Citizens Financial and PTT Global

Assuming the 90 days horizon Citizens Financial Group is expected to generate 0.37 times more return on investment than PTT Global. However, Citizens Financial Group is 2.71 times less risky than PTT Global. It trades about -0.01 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.01 per unit of risk. If you would invest  4,326  in Citizens Financial Group on October 11, 2024 and sell it today you would lose (19.00) from holding Citizens Financial Group or give up 0.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citizens Financial Group  vs.  PTT Global Chemical

Citizens Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Citizens Financial reported solid returns over the last few months and may actually be approaching a breakup point.

PTT Global Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Global Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Citizens Financial and PTT Global

The main advantage of trading using opposite Citizens Financial and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Financial 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.

The idea behind Citizens Financial Group and PTT Global Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.