Correlation Between PTT Public and Bangkok Dusit

Can any of the company-specific risk be diversified away by investing in both PTT Public and Bangkok Dusit 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 Public and Bangkok Dusit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PTT Public and Bangkok Dusit Medical, you can compare the effects of market volatilities on PTT Public and Bangkok Dusit 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 Public with a short position of Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Bangkok Dusit.

Diversification Opportunities for PTT Public and Bangkok Dusit

0.19

Correlation Coefficient

PTT Public  Bangkok Dusit

Average diversification

The 3 months correlation between PTT and Bangkok is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical and PTT Public 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 Public are associated (or correlated) with Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of PTT Public i.e., PTT Public and Bangkok Dusit go up and down completely randomly.

Pair Corralation between PTT Public and Bangkok Dusit

Assuming the 90 days trading horizon PTT Public is expected to generate 227.94 times less return on investment than Bangkok Dusit. But when comparing it to its historical volatility, PTT Public is 60.51 times less risky than Bangkok Dusit. It trades about 0.02 of its potential returns per unit of risk. Bangkok Dusit Medical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,013  in Bangkok Dusit Medical on October 11, 2024 and sell it today you would lose (613.00) from holding Bangkok Dusit Medical or give up 20.35% of portfolio value over 90 days.

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

PTT Public  vs.  Bangkok Dusit Medical

PTT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Bangkok Dusit Medical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bangkok Dusit Medical are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Bangkok Dusit sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Public and Bangkok Dusit

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

The idea behind PTT Public and Bangkok Dusit Medical 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.