Correlation Between PTT Global and Williams Companies

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

Diversification Opportunities for PTT Global and Williams Companies

-0.48

Correlation Coefficient

PTT Global  Williams Companies

Very good diversification

The 3 months correlation between PTT and Williams is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and The Williams Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Williams Companies 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 Williams Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Williams Companies has no effect on the direction of PTT Global i.e., PTT Global and Williams Companies go up and down completely randomly.

Pair Corralation between PTT Global and Williams Companies

Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Williams Companies. In addition to that, PTT Global is 1.77 times more volatile than The Williams Companies. It trades about -0.2 of its total potential returns per unit of risk. The Williams Companies is currently generating about 0.36 per unit of volatility. If you would invest  5,147  in The Williams Companies on October 26, 2024 and sell it today you would earn a total of  583.00  from holding The Williams Companies or generate 11.33% return on investment over 90 days.

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

PTT Global Chemical  vs.  The Williams Companies

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 unsteady 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.

The Williams Companies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Williams Companies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, Williams Companies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Global and Williams Companies

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

The idea behind PTT Global Chemical and The Williams Companies 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 CEOs Directory module to screen CEOs from public companies around the world.