Correlation Between Chevron and PTT Public

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

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

Diversification Opportunities for Chevron and PTT Public

-0.65

Correlation Coefficient

Chevron  PTT Public

Excellent diversification

The 3 months correlation between Chevron and PTT is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chevron and PTT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Public and Chevron 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 Chevron 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 Chevron i.e., Chevron and PTT Public go up and down completely randomly.

Pair Corralation between Chevron and PTT Public

Assuming the 90 days trading horizon Chevron is expected to under-perform the PTT Public. But the stock apears to be less risky and, when comparing its historical volatility, Chevron is 1.09 times less risky than PTT Public. The stock trades about -0.45 of its potential returns per unit of risk. The PTT Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  88.00  in PTT Public on September 29, 2024 and sell it today you would earn a total of  0.00  from holding PTT Public or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Chevron  vs.  PTT Public

Chevron

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Chevron may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PTT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PTT Public is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Chevron and PTT Public

The main advantage of trading using opposite Chevron and PTT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron 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 Chevron 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.