Correlation Between PTT Global and Zoetis

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

Diversification Opportunities for PTT Global and Zoetis

0.33

Correlation Coefficient

PTT Global  Zoetis

Weak diversification

The 3 months correlation between PTT and Zoetis is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Zoetis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoetis Inc 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 Zoetis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoetis Inc has no effect on the direction of PTT Global i.e., PTT Global and Zoetis go up and down completely randomly.

Pair Corralation between PTT Global and Zoetis

Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 2.71 times more return on investment than Zoetis. However, PTT Global is 2.71 times more volatile than Zoetis Inc. It trades about 0.0 of its potential returns per unit of risk. Zoetis Inc is currently generating about -0.02 per unit of risk. If you would invest  68.00  in PTT Global Chemical on October 6, 2024 and sell it today you would lose (1.00) from holding PTT Global Chemical or give up 1.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

PTT Global Chemical  vs.  Zoetis Inc

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 comparatively stable basic indicators, PTT Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Zoetis Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zoetis Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PTT Global and Zoetis

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

The idea behind PTT Global Chemical and Zoetis Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.