Correlation Between North East and PTT Public

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

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

Diversification Opportunities for North East and PTT Public

-0.07

Correlation Coefficient

North East  PTT Public

Good diversification

The 3 months correlation between North and PTT is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding North East Rubbers and PTT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Public and North East 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 North East Rubbers are associated (or correlated) with PTT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Public has no effect on the direction of North East i.e., North East and PTT Public go up and down completely randomly.

Pair Corralation between North East and PTT Public

Assuming the 90 days trading horizon North East Rubbers is expected to generate 1.34 times more return on investment than PTT Public. However, North East is 1.34 times more volatile than PTT Public. It trades about 0.03 of its potential returns per unit of risk. PTT Public is currently generating about -0.01 per unit of risk. If you would invest  486.00  in North East Rubbers on December 2, 2024 and sell it today you would earn a total of  10.00  from holding North East Rubbers or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

North East Rubbers  vs.  PTT Public

North East Rubbers

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in North East Rubbers are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, North East is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PTT Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, PTT Public is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with North East and PTT Public

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

The idea behind North East Rubbers and PTT Public 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.