Correlation Between PTT Global and DELTA AIR

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

Diversification Opportunities for PTT Global and DELTA AIR

-0.57

Correlation Coefficient

PTT Global  DELTA AIR

Excellent diversification

The 3 months correlation between PTT and DELTA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and DELTA AIR LINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DELTA AIR LINES 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 DELTA AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DELTA AIR LINES has no effect on the direction of PTT Global i.e., PTT Global and DELTA AIR go up and down completely randomly.

Pair Corralation between PTT Global and DELTA AIR

Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 11.97 times more return on investment than DELTA AIR. However, PTT Global is 11.97 times more volatile than DELTA AIR LINES. It trades about 0.04 of its potential returns per unit of risk. DELTA AIR LINES is currently generating about 0.1 per unit of risk. If you would invest  96.00  in PTT Global Chemical on September 4, 2024 and sell it today you would lose (33.00) from holding PTT Global Chemical or give up 34.37% of portfolio value over 90 days.

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

PTT Global Chemical  vs.  DELTA AIR LINES

PTT Global Chemical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Global Chemical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, PTT Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

DELTA AIR LINES

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DELTA AIR LINES are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, DELTA AIR unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Global and DELTA AIR

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

The idea behind PTT Global Chemical and DELTA AIR LINES 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.