Correlation Between IRPC Public and PTT Global

Can any of the company-specific risk be diversified away by investing in both IRPC Public and PTT Global 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 IRPC Public and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IRPC Public and PTT Global Chemical, you can compare the effects of market volatilities on IRPC Public and PTT Global 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 IRPC Public with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRPC Public and PTT Global.

Diversification Opportunities for IRPC Public and PTT Global

0.32

Correlation Coefficient

IRPC Public  PTT Global

Weak diversification

The 3 months correlation between IRPC and PTT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding IRPC Public and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical and IRPC Public 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 IRPC Public are associated (or correlated) with PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of IRPC Public i.e., IRPC Public and PTT Global go up and down completely randomly.

Pair Corralation between IRPC Public and PTT Global

Assuming the 90 days trading horizon IRPC Public is expected to under-perform the PTT Global. But the stock apears to be less risky and, when comparing its historical volatility, IRPC Public is 1.16 times less risky than PTT Global. The stock trades about -0.03 of its potential returns per unit of risk. The PTT Global Chemical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,550  in PTT Global Chemical on September 4, 2024 and sell it today you would earn a total of  0.00  from holding PTT Global Chemical or generate 0.0% return on investment over 90 days.

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

IRPC Public  vs.  PTT Global Chemical

IRPC Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IRPC Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, IRPC Public is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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. Despite somewhat strong fundamental drivers, PTT Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IRPC Public and PTT Global

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

The idea behind IRPC Public and PTT Global Chemical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.