Correlation Between Lyxor 1 and PTT Exploration

Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and PTT Exploration 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 Lyxor 1 and PTT Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lyxor 1 and PTT Exploration and, you can compare the effects of market volatilities on Lyxor 1 and PTT Exploration 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 Lyxor 1 with a short position of PTT Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and PTT Exploration.

Diversification Opportunities for Lyxor 1 and PTT Exploration

-0.12

Correlation Coefficient

Lyxor 1  PTT Exploration

Good diversification

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

Pair Corralation between Lyxor 1 and PTT Exploration

Assuming the 90 days trading horizon Lyxor 1 is expected to generate 1.8 times less return on investment than PTT Exploration. But when comparing it to its historical volatility, Lyxor 1 is 3.8 times less risky than PTT Exploration. It trades about 0.13 of its potential returns per unit of risk. PTT Exploration and is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  299.00  in PTT Exploration and on December 28, 2024 and sell it today you would earn a total of  33.00  from holding PTT Exploration and or generate 11.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Lyxor 1   vs.  PTT Exploration and

Lyxor 1

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor 1 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Lyxor 1 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PTT Exploration

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Exploration and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PTT Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lyxor 1 and PTT Exploration

The main advantage of trading using opposite Lyxor 1 and PTT Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, PTT Exploration 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 Exploration will offset losses from the drop in PTT Exploration's long position.

The idea behind Lyxor 1 and PTT Exploration 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.