Correlation Between Nawarat Patanakarn and PTG Energy

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

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

Diversification Opportunities for Nawarat Patanakarn and PTG Energy

0.72

Correlation Coefficient

Nawarat Patanakarn  PTG Energy

Poor diversification

The 3 months correlation between Nawarat and PTG is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nawarat Patanakarn Public and PTG Energy PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTG Energy PCL and Nawarat Patanakarn 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 Nawarat Patanakarn Public are associated (or correlated) with PTG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTG Energy PCL has no effect on the direction of Nawarat Patanakarn i.e., Nawarat Patanakarn and PTG Energy go up and down completely randomly.

Pair Corralation between Nawarat Patanakarn and PTG Energy

Assuming the 90 days trading horizon Nawarat Patanakarn Public is expected to under-perform the PTG Energy. In addition to that, Nawarat Patanakarn is 3.22 times more volatile than PTG Energy PCL. It trades about -0.08 of its total potential returns per unit of risk. PTG Energy PCL is currently generating about -0.1 per unit of volatility. If you would invest  792.00  in PTG Energy PCL on December 29, 2024 and sell it today you would lose (102.00) from holding PTG Energy PCL or give up 12.88% of portfolio value over 90 days.

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

Nawarat Patanakarn Public  vs.  PTG Energy PCL

Nawarat Patanakarn Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nawarat Patanakarn Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PTG Energy PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTG Energy PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Nawarat Patanakarn and PTG Energy

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

The idea behind Nawarat Patanakarn Public and PTG Energy PCL 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.