Correlation Between PTT Oil and Home Product
Can any of the company-specific risk be diversified away by investing in both PTT Oil and Home Product 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 Home Product into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Oil and and Home Product Center, you can compare the effects of market volatilities on PTT Oil and Home Product 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 Home Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Oil and Home Product.
Diversification Opportunities for PTT Oil and Home Product
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PTT and Home is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PTT Oil and and Home Product Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Product Center 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 and are associated (or correlated) with Home Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Product Center has no effect on the direction of PTT Oil i.e., PTT Oil and Home Product go up and down completely randomly.
Pair Corralation between PTT Oil and Home Product
Assuming the 90 days horizon PTT Oil and is expected to under-perform the Home Product. But the stock apears to be less risky and, when comparing its historical volatility, PTT Oil and is 1.14 times less risky than Home Product. The stock trades about -0.08 of its potential returns per unit of risk. The Home Product Center is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 940.00 in Home Product Center on December 28, 2024 and sell it today you would lose (120.00) from holding Home Product Center or give up 12.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PTT Oil and vs. Home Product Center
Performance |
Timeline |
PTT Oil |
Home Product Center |
PTT Oil and Home Product Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PTT Oil and Home Product
The main advantage of trading using opposite PTT Oil and Home Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Oil position performs unexpectedly, Home Product 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 Home Product will offset losses from the drop in Home Product's long position.PTT Oil vs. PTT Public | PTT Oil vs. CP ALL Public | PTT Oil vs. Kasikornbank Public | PTT Oil vs. Airports of Thailand |
Home Product vs. CP ALL Public | Home Product vs. Bangkok Dusit Medical | Home Product vs. Central Pattana Public | Home Product vs. Advanced Info Service |
Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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