Correlation Between Neste Oyj and PTT OIL+RETBUS-FOR-B
Can any of the company-specific risk be diversified away by investing in both Neste Oyj and PTT OIL+RETBUS-FOR-B 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 Neste Oyj and PTT OIL+RETBUS-FOR-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neste Oyj and PTT OILRETBUS FOR BA10, you can compare the effects of market volatilities on Neste Oyj and PTT OIL+RETBUS-FOR-B 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 Neste Oyj with a short position of PTT OIL+RETBUS-FOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neste Oyj and PTT OIL+RETBUS-FOR-B.
Diversification Opportunities for Neste Oyj and PTT OIL+RETBUS-FOR-B
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Neste and PTT is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Neste Oyj and PTT OILRETBUS FOR BA10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL+RETBUS-FOR-B and Neste Oyj 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 Neste Oyj are associated (or correlated) with PTT OIL+RETBUS-FOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL+RETBUS-FOR-B has no effect on the direction of Neste Oyj i.e., Neste Oyj and PTT OIL+RETBUS-FOR-B go up and down completely randomly.
Pair Corralation between Neste Oyj and PTT OIL+RETBUS-FOR-B
Assuming the 90 days horizon Neste Oyj is expected to under-perform the PTT OIL+RETBUS-FOR-B. In addition to that, Neste Oyj is 1.1 times more volatile than PTT OILRETBUS FOR BA10. It trades about -0.12 of its total potential returns per unit of risk. PTT OILRETBUS FOR BA10 is currently generating about -0.06 per unit of volatility. If you would invest 44.00 in PTT OILRETBUS FOR BA10 on December 4, 2024 and sell it today you would lose (16.00) from holding PTT OILRETBUS FOR BA10 or give up 36.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Neste Oyj vs. PTT OILRETBUS FOR BA10
Performance |
Timeline |
Neste Oyj |
PTT OIL+RETBUS-FOR-B |
Neste Oyj and PTT OIL+RETBUS-FOR-B Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Neste Oyj and PTT OIL+RETBUS-FOR-B
The main advantage of trading using opposite Neste Oyj and PTT OIL+RETBUS-FOR-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neste Oyj position performs unexpectedly, PTT OIL+RETBUS-FOR-B 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 OIL+RETBUS-FOR-B will offset losses from the drop in PTT OIL+RETBUS-FOR-B's long position.Neste Oyj vs. SAFEROADS HLDGS | Neste Oyj vs. KENEDIX OFFICE INV | Neste Oyj vs. Air Transport Services | Neste Oyj vs. NAGOYA RAILROAD |
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Check out your portfolio center.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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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