Correlation Between TRI CHEMICAL and PTT Global

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

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

Diversification Opportunities for TRI CHEMICAL and PTT Global

0.87

Correlation Coefficient

TRI CHEMICAL  PTT Global

Very poor diversification

The 3 months correlation between TRI and PTT is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding TRI CHEMICAL LABORATINC 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 TRI CHEMICAL 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 TRI CHEMICAL LABORATINC 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 TRI CHEMICAL i.e., TRI CHEMICAL and PTT Global go up and down completely randomly.

Pair Corralation between TRI CHEMICAL and PTT Global

Assuming the 90 days horizon TRI CHEMICAL is expected to generate 7.99 times less return on investment than PTT Global. But when comparing it to its historical volatility, TRI CHEMICAL LABORATINC is 5.93 times less risky than PTT Global. It trades about 0.02 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  107.00  in PTT Global Chemical on October 4, 2024 and sell it today you would lose (43.00) from holding PTT Global Chemical or give up 40.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

TRI CHEMICAL LABORATINC  vs.  PTT Global Chemical

TRI CHEMICAL LABORATINC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRI CHEMICAL LABORATINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 TRI CHEMICAL and PTT Global

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

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.