Correlation Between PTT OIL+RETBUS-NVDR- and Idemitsu Kosan

Can any of the company-specific risk be diversified away by investing in both PTT OIL+RETBUS-NVDR- and Idemitsu Kosan 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 PTT OIL+RETBUS-NVDR- and Idemitsu Kosan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PTT OILRETBUS NVDR 10 and Idemitsu Kosan CoLtd, you can compare the effects of market volatilities on PTT OIL+RETBUS-NVDR- and Idemitsu Kosan 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 PTT OIL+RETBUS-NVDR- with a short position of Idemitsu Kosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT OIL+RETBUS-NVDR- and Idemitsu Kosan.

Diversification Opportunities for PTT OIL+RETBUS-NVDR- and Idemitsu Kosan

-0.32

Correlation Coefficient

PTT OIL+RETBUS-NVDR-  Idemitsu Kosan

Very good diversification

The 3 months correlation between PTT and Idemitsu is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PTT OILRETBUS NVDR 10 and Idemitsu Kosan CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idemitsu Kosan CoLtd and PTT OIL+RETBUS-NVDR- 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 PTT OILRETBUS NVDR 10 are associated (or correlated) with Idemitsu Kosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idemitsu Kosan CoLtd has no effect on the direction of PTT OIL+RETBUS-NVDR- i.e., PTT OIL+RETBUS-NVDR- and Idemitsu Kosan go up and down completely randomly.

Pair Corralation between PTT OIL+RETBUS-NVDR- and Idemitsu Kosan

Assuming the 90 days trading horizon PTT OILRETBUS NVDR 10 is expected to under-perform the Idemitsu Kosan. In addition to that, PTT OIL+RETBUS-NVDR- is 1.54 times more volatile than Idemitsu Kosan CoLtd. It trades about -0.13 of its total potential returns per unit of risk. Idemitsu Kosan CoLtd is currently generating about 0.03 per unit of volatility. If you would invest  630.00  in Idemitsu Kosan CoLtd on December 4, 2024 and sell it today you would earn a total of  15.00  from holding Idemitsu Kosan CoLtd or generate 2.38% return on investment over 90 days.

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

PTT OILRETBUS NVDR 10  vs.  Idemitsu Kosan CoLtd

PTT OIL+RETBUS-NVDR-

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTT OILRETBUS NVDR 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Idemitsu Kosan CoLtd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Idemitsu Kosan CoLtd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Idemitsu Kosan is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PTT OIL+RETBUS-NVDR- and Idemitsu Kosan

The main advantage of trading using opposite PTT OIL+RETBUS-NVDR- and Idemitsu Kosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT OIL+RETBUS-NVDR- position performs unexpectedly, Idemitsu Kosan 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 Idemitsu Kosan will offset losses from the drop in Idemitsu Kosan's long position.

The idea behind PTT OILRETBUS NVDR 10 and Idemitsu Kosan CoLtd 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.