Correlation Between PMB Technology and PTT Synergy

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

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

Diversification Opportunities for PMB Technology and PTT Synergy

-0.12

Correlation Coefficient

PMB Technology  PTT Synergy

Good diversification

The 3 months correlation between PMB and PTT is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PMB Technology Bhd and PTT Synergy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Synergy Group and PMB Technology 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 PMB Technology Bhd are associated (or correlated) with PTT Synergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Synergy Group has no effect on the direction of PMB Technology i.e., PMB Technology and PTT Synergy go up and down completely randomly.

Pair Corralation between PMB Technology and PTT Synergy

Assuming the 90 days trading horizon PMB Technology Bhd is expected to under-perform the PTT Synergy. But the stock apears to be less risky and, when comparing its historical volatility, PMB Technology Bhd is 1.58 times less risky than PTT Synergy. The stock trades about -0.07 of its potential returns per unit of risk. The PTT Synergy Group is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  108.00  in PTT Synergy Group on October 13, 2024 and sell it today you would earn a total of  24.00  from holding PTT Synergy Group or generate 22.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

PMB Technology Bhd  vs.  PTT Synergy Group

PMB Technology Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PMB Technology Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, PMB Technology is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PTT Synergy Group

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with PMB Technology and PTT Synergy

The main advantage of trading using opposite PMB Technology and PTT Synergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PMB Technology position performs unexpectedly, PTT Synergy 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 Synergy will offset losses from the drop in PTT Synergy's long position.

The idea behind PMB Technology Bhd and PTT Synergy Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.