Correlation Between PTT Global and TTM Technologies

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

Diversification Opportunities for PTT Global and TTM Technologies

-0.68

Correlation Coefficient

PTT Global  TTM Technologies

Excellent diversification

The 3 months correlation between PTT and TTM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies 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 TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of PTT Global i.e., PTT Global and TTM Technologies go up and down completely randomly.

Pair Corralation between PTT Global and TTM Technologies

Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 7.45 times more return on investment than TTM Technologies. However, PTT Global is 7.45 times more volatile than TTM Technologies. It trades about 0.03 of its potential returns per unit of risk. TTM Technologies is currently generating about 0.05 per unit of risk. If you would invest  107.00  in PTT Global Chemical on October 4, 2024 and sell it today you would lose (43.00) from holding PTT Global Chemical or give up 40.19% of portfolio value over 90 days.

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

PTT Global Chemical  vs.  TTM Technologies

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.

TTM Technologies

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TTM Technologies are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TTM Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Global and TTM Technologies

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

The idea behind PTT Global Chemical and TTM Technologies 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.