Correlation Between PTT OIL and Tipco Foods

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

Diversification Opportunities for PTT OIL and Tipco Foods

0.59

Correlation Coefficient

PTT OIL  Tipco Foods

Very weak diversification

The 3 months correlation between PTT and Tipco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PTT OIL RETAIL and Tipco Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tipco Foods Public 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 Tipco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tipco Foods Public has no effect on the direction of PTT OIL i.e., PTT OIL and Tipco Foods go up and down completely randomly.

Pair Corralation between PTT OIL and Tipco Foods

Assuming the 90 days trading horizon PTT OIL RETAIL is expected to under-perform the Tipco Foods. In addition to that, PTT OIL is 3.83 times more volatile than Tipco Foods Public. It trades about -0.05 of its total potential returns per unit of risk. Tipco Foods Public is currently generating about -0.12 per unit of volatility. If you would invest  1,010  in Tipco Foods Public on December 29, 2024 and sell it today you would lose (55.00) from holding Tipco Foods Public or give up 5.45% of portfolio value over 90 days.

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

PTT OIL RETAIL  vs.  Tipco Foods Public

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 weak 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.

Tipco Foods Public

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PTT OIL and Tipco Foods

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

The idea behind PTT OIL RETAIL and Tipco Foods 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.