Correlation Between Bangkok Expressway and PTT Oil

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

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

Diversification Opportunities for Bangkok Expressway and PTT Oil

0.74

Correlation Coefficient

Bangkok Expressway  PTT Oil

Poor diversification

The 3 months correlation between Bangkok and PTT is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Expressway and and PTT Oil and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Oil and Bangkok Expressway 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 Expressway and are associated (or correlated) with PTT Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Oil has no effect on the direction of Bangkok Expressway i.e., Bangkok Expressway and PTT Oil go up and down completely randomly.

Pair Corralation between Bangkok Expressway and PTT Oil

Assuming the 90 days trading horizon Bangkok Expressway and is expected to under-perform the PTT Oil. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Expressway and is 1.45 times less risky than PTT Oil. The stock trades about -0.2 of its potential returns per unit of risk. The PTT Oil and is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,317  in PTT Oil and on December 29, 2024 and sell it today you would lose (127.00) from holding PTT Oil and or give up 9.64% of portfolio value over 90 days.

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

Bangkok Expressway and  vs.  PTT Oil and

Bangkok Expressway and

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bangkok Expressway and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PTT Oil

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Bangkok Expressway and PTT Oil

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

The idea behind Bangkok Expressway and and PTT Oil and 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.