Correlation Between PTT OIL and SCG PACKAGING

Can any of the company-specific risk be diversified away by investing in both PTT OIL and SCG PACKAGING 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 SCG PACKAGING 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 SCG PACKAGING PCL NVDR, you can compare the effects of market volatilities on PTT OIL and SCG PACKAGING 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 SCG PACKAGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT OIL and SCG PACKAGING.

Diversification Opportunities for PTT OIL and SCG PACKAGING

0.81

Correlation Coefficient

PTT OIL  SCG PACKAGING

Very poor diversification

The 3 months correlation between PTT and SCG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PTT OIL RETAIL and SCG PACKAGING PCL NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCG PACKAGING PCL 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 SCG PACKAGING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCG PACKAGING PCL has no effect on the direction of PTT OIL i.e., PTT OIL and SCG PACKAGING go up and down completely randomly.

Pair Corralation between PTT OIL and SCG PACKAGING

Assuming the 90 days trading horizon PTT OIL RETAIL is expected to generate 0.9 times more return on investment than SCG PACKAGING. However, PTT OIL RETAIL is 1.11 times less risky than SCG PACKAGING. It trades about -0.05 of its potential returns per unit of risk. SCG PACKAGING PCL NVDR is currently generating about -0.17 per unit of risk. If you would invest  1,338  in PTT OIL RETAIL on December 29, 2024 and sell it today you would lose (148.00) from holding PTT OIL RETAIL or give up 11.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

PTT OIL RETAIL  vs.  SCG PACKAGING PCL NVDR

PTT OIL RETAIL

Risk-Adjusted Performance

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 latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

SCG PACKAGING PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SCG PACKAGING PCL NVDR 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PTT OIL and SCG PACKAGING

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

The idea behind PTT OIL RETAIL and SCG PACKAGING PCL NVDR 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.