Correlation Between PTT Oil and Ngern Tid

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

Diversification Opportunities for PTT Oil and Ngern Tid

0.31

Correlation Coefficient

PTT Oil  Ngern Tid

Weak diversification

The 3 months correlation between PTT and Ngern is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PTT Oil and and Ngern Tid Lor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ngern Tid Lor 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 Ngern Tid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ngern Tid Lor has no effect on the direction of PTT Oil i.e., PTT Oil and Ngern Tid go up and down completely randomly.

Pair Corralation between PTT Oil and Ngern Tid

Assuming the 90 days horizon PTT Oil and is expected to under-perform the Ngern Tid. But the stock apears to be less risky and, when comparing its historical volatility, PTT Oil and is 65.95 times less risky than Ngern Tid. The stock trades about -0.05 of its potential returns per unit of risk. The Ngern Tid Lor is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Ngern Tid Lor on September 3, 2024 and sell it today you would earn a total of  1,780  from holding Ngern Tid Lor or generate 9.223372036854776E16% 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.  Ngern Tid Lor

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.

Ngern Tid Lor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ngern Tid Lor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Ngern Tid sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Oil and Ngern Tid

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

The idea behind PTT Oil and and Ngern Tid Lor 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.