Correlation Between Bangkok Dusit and PTT Public

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

By analyzing existing cross correlation between Bangkok Dusit Medical and PTT Public, you can compare the effects of market volatilities on Bangkok Dusit and PTT Public 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 Bangkok Dusit with a short position of PTT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and PTT Public.

Diversification Opportunities for Bangkok Dusit and PTT Public

-0.12

Correlation Coefficient

Bangkok Dusit  PTT Public

Good diversification

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

Pair Corralation between Bangkok Dusit and PTT Public

Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the PTT Public. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Dusit Medical is 1.07 times less risky than PTT Public. The stock trades about -0.08 of its potential returns per unit of risk. The PTT Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,046  in PTT Public on December 29, 2024 and sell it today you would earn a total of  154.00  from holding PTT Public or generate 5.06% return on investment over 90 days.

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

Bangkok Dusit Medical  vs.  PTT Public

Bangkok Dusit Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Dusit Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

PTT Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, PTT Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bangkok Dusit and PTT Public

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

The idea behind Bangkok Dusit Medical and PTT Public 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.