Correlation Between PTT Public and TotalEnergies

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

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

Diversification Opportunities for PTT Public and TotalEnergies

0.6

Correlation Coefficient

PTT Public  TotalEnergies

Poor diversification

The 3 months correlation between PTT and TotalEnergies is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE and PTT 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 PTT Public are associated (or correlated) with TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of PTT Public i.e., PTT Public and TotalEnergies go up and down completely randomly.

Pair Corralation between PTT Public and TotalEnergies

Assuming the 90 days trading horizon PTT Public is expected to generate 1.19 times more return on investment than TotalEnergies. However, PTT Public is 1.19 times more volatile than TotalEnergies SE. It trades about 0.05 of its potential returns per unit of risk. TotalEnergies SE is currently generating about -0.08 per unit of risk. If you would invest  87.00  in PTT Public on October 3, 2024 and sell it today you would earn a total of  1.00  from holding PTT Public or generate 1.15% return on investment over 90 days.

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

PTT Public  vs.  TotalEnergies SE

PTT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PTT Public is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

TotalEnergies SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TotalEnergies SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PTT Public and TotalEnergies

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

The idea behind PTT Public and TotalEnergies SE 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.