Correlation Between HYDROFARM HLD and PTT Global

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

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

Diversification Opportunities for HYDROFARM HLD and PTT Global

-0.09

Correlation Coefficient

HYDROFARM HLD  PTT Global

Good diversification

The 3 months correlation between HYDROFARM and PTT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP 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 HYDROFARM HLD 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 HYDROFARM HLD GRP 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 HYDROFARM HLD i.e., HYDROFARM HLD and PTT Global go up and down completely randomly.

Pair Corralation between HYDROFARM HLD and PTT Global

Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to under-perform the PTT Global. But the stock apears to be less risky and, when comparing its historical volatility, HYDROFARM HLD GRP is 3.07 times less risky than PTT Global. The stock trades about 0.0 of its potential returns per unit of risk. The PTT Global Chemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  96.00  in PTT Global Chemical on September 15, 2024 and sell it today you would lose (31.00) from holding PTT Global Chemical or give up 32.29% of portfolio value over 90 days.

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

HYDROFARM HLD GRP  vs.  PTT Global Chemical

HYDROFARM HLD GRP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HYDROFARM HLD GRP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HYDROFARM HLD may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 HYDROFARM HLD and PTT Global

The main advantage of trading using opposite HYDROFARM HLD and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD 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 HYDROFARM HLD GRP 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.