Correlation Between PTT Public and FN Factory

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

By analyzing existing cross correlation between PTT Public and FN Factory Outlet, you can compare the effects of market volatilities on PTT Public and FN Factory 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 FN Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and FN Factory.

Diversification Opportunities for PTT Public and FN Factory

0.35

Correlation Coefficient

PTT Public  FN Factory

Weak diversification

The 3 months correlation between PTT and FN Factory is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and FN Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FN Factory Outlet 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 FN Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FN Factory Outlet has no effect on the direction of PTT Public i.e., PTT Public and FN Factory go up and down completely randomly.

Pair Corralation between PTT Public and FN Factory

Assuming the 90 days trading horizon PTT Public is expected to generate 0.4 times more return on investment than FN Factory. However, PTT Public is 2.53 times less risky than FN Factory. It trades about 0.06 of its potential returns per unit of risk. FN Factory Outlet is currently generating about -0.09 per unit of risk. If you would invest  2,994  in PTT Public on December 22, 2024 and sell it today you would earn a total of  181.00  from holding PTT Public or generate 6.05% return on investment over 90 days.

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

PTT Public  vs.  FN Factory Outlet

PTT Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, PTT Public may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FN Factory Outlet

Risk-Adjusted Performance

Very Weak

Over the last 90 days FN Factory Outlet has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PTT Public and FN Factory

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

The idea behind PTT Public and FN Factory Outlet 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.