Correlation Between PTT Global and Walmart

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

Diversification Opportunities for PTT Global and Walmart

-0.06

Correlation Coefficient

PTT Global  Walmart

Good diversification

The 3 months correlation between PTT and Walmart is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of PTT Global i.e., PTT Global and Walmart go up and down completely randomly.

Pair Corralation between PTT Global and Walmart

Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 3.46 times more return on investment than Walmart. However, PTT Global is 3.46 times more volatile than Walmart. It trades about 0.04 of its potential returns per unit of risk. Walmart is currently generating about -0.03 per unit of risk. If you would invest  63.00  in PTT Global Chemical on October 10, 2024 and sell it today you would earn a total of  1.00  from holding PTT Global Chemical or generate 1.59% return on investment over 90 days.

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

PTT Global Chemical  vs.  Walmart

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.

Walmart

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Walmart reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Global and Walmart

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

The idea behind PTT Global Chemical and Walmart 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.