Correlation Between PTT OIL and PMC LABEL

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

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

Diversification Opportunities for PTT OIL and PMC LABEL

0.79

Correlation Coefficient

PTT OIL  PMC LABEL

Poor diversification

The 3 months correlation between PTT and PMC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PTT OIL RETAIL and PMC LABEL MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMC LABEL MATERIALS and PTT OIL 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 OIL RETAIL are associated (or correlated) with PMC LABEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMC LABEL MATERIALS has no effect on the direction of PTT OIL i.e., PTT OIL and PMC LABEL go up and down completely randomly.

Pair Corralation between PTT OIL and PMC LABEL

Assuming the 90 days trading horizon PTT OIL RETAIL is expected to under-perform the PMC LABEL. In addition to that, PTT OIL is 1.34 times more volatile than PMC LABEL MATERIALS. It trades about -0.19 of its total potential returns per unit of risk. PMC LABEL MATERIALS is currently generating about -0.13 per unit of volatility. If you would invest  119.00  in PMC LABEL MATERIALS on October 23, 2024 and sell it today you would lose (29.00) from holding PMC LABEL MATERIALS or give up 24.37% of portfolio value over 90 days.

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

PTT OIL RETAIL  vs.  PMC LABEL MATERIALS

PTT OIL RETAIL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT OIL RETAIL 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PMC LABEL MATERIALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PMC LABEL MATERIALS 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 fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PTT OIL and PMC LABEL

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

The idea behind PTT OIL RETAIL and PMC LABEL MATERIALS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.