Correlation Between PTT Public and Banpu Public

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

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

Diversification Opportunities for PTT Public and Banpu Public

0.54

Correlation Coefficient

PTT Public  Banpu Public

Very weak diversification

The 3 months correlation between PTT and Banpu is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Banpu Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu Public 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 Banpu Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu Public has no effect on the direction of PTT Public i.e., PTT Public and Banpu Public go up and down completely randomly.

Pair Corralation between PTT Public and Banpu Public

Assuming the 90 days trading horizon PTT Public is expected to under-perform the Banpu Public. But the stock apears to be less risky and, when comparing its historical volatility, PTT Public is 1.78 times less risky than Banpu Public. The stock trades about -0.14 of its potential returns per unit of risk. The Banpu Public is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  580.00  in Banpu Public on September 12, 2024 and sell it today you would lose (10.00) from holding Banpu Public or give up 1.72% of portfolio value over 90 days.

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

PTT Public  vs.  Banpu Public

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 quite persistent basic indicators, PTT Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Banpu Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banpu Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Banpu Public is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PTT Public and Banpu Public

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

The idea behind PTT Public and Banpu 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.