Correlation Between PTT Global and Boston Beer

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

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

Diversification Opportunities for PTT Global and Boston Beer

0.76

Correlation Coefficient

PTT Global  Boston Beer

Poor diversification

The 3 months correlation between PTT and Boston is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and The Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer and PTT Global 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 Global Chemical are associated (or correlated) with Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of PTT Global i.e., PTT Global and Boston Beer go up and down completely randomly.

Pair Corralation between PTT Global and Boston Beer

Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Boston Beer. In addition to that, PTT Global is 1.7 times more volatile than The Boston Beer. It trades about -0.15 of its total potential returns per unit of risk. The Boston Beer is currently generating about -0.19 per unit of volatility. If you would invest  28,360  in The Boston Beer on December 29, 2024 and sell it today you would lose (6,280) from holding The Boston Beer or give up 22.14% of portfolio value over 90 days.

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

PTT Global Chemical  vs.  The Boston Beer

PTT Global Chemical

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTT Global Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Boston Beer

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Boston Beer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental 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.

Pair Trading with PTT Global and Boston Beer

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

The idea behind PTT Global Chemical and The Boston Beer 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.