Correlation Between PTT Oil and Muangthai Capital

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

Diversification Opportunities for PTT Oil and Muangthai Capital

0.23

Correlation Coefficient

PTT Oil  Muangthai Capital

Modest diversification

The 3 months correlation between PTT and Muangthai is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PTT Oil and and Muangthai Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muangthai Capital 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 and are associated (or correlated) with Muangthai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muangthai Capital Public has no effect on the direction of PTT Oil i.e., PTT Oil and Muangthai Capital go up and down completely randomly.

Pair Corralation between PTT Oil and Muangthai Capital

Assuming the 90 days horizon PTT Oil and is expected to under-perform the Muangthai Capital. But the stock apears to be less risky and, when comparing its historical volatility, PTT Oil and is 66.3 times less risky than Muangthai Capital. The stock trades about -0.04 of its potential returns per unit of risk. The Muangthai Capital Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,375  in Muangthai Capital Public on September 2, 2024 and sell it today you would earn a total of  550.00  from holding Muangthai Capital Public or generate 12.57% return on investment over 90 days.

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

PTT Oil and  vs.  Muangthai Capital Public

PTT Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Oil and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, PTT Oil is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Muangthai Capital Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Muangthai Capital Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Muangthai Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Oil and Muangthai Capital

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

The idea behind PTT Oil and and Muangthai Capital 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.