Correlation Between PTT Global and Fastenal

Can any of the company-specific risk be diversified away by investing in both PTT Global and Fastenal 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 Fastenal 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 Fastenal Company, you can compare the effects of market volatilities on PTT Global and Fastenal 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 Fastenal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and Fastenal.

Diversification Opportunities for PTT Global and Fastenal

-0.67

Correlation Coefficient

PTT Global  Fastenal

Excellent diversification

The 3 months correlation between PTT and Fastenal is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of PTT Global i.e., PTT Global and Fastenal go up and down completely randomly.

Pair Corralation between PTT Global and Fastenal

Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Fastenal. In addition to that, PTT Global is 1.77 times more volatile than Fastenal Company. It trades about -0.04 of its total potential returns per unit of risk. Fastenal Company is currently generating about 0.09 per unit of volatility. If you would invest  6,320  in Fastenal Company on October 8, 2024 and sell it today you would earn a total of  589.00  from holding Fastenal Company or generate 9.32% return on investment over 90 days.

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

PTT Global Chemical  vs.  Fastenal Company

PTT Global Chemical

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Fastenal

Risk-Adjusted Performance

7 of 100

Modest

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

Pair Trading with PTT Global and Fastenal

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

The idea behind PTT Global Chemical and Fastenal Company 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.