Correlation Between PTT Public and Central Pattana
Can any of the company-specific risk be diversified away by investing in both PTT Public and Central Pattana 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 Central Pattana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Public and Central Pattana Public, you can compare the effects of market volatilities on PTT Public and Central Pattana 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 Central Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Public and Central Pattana.
Diversification Opportunities for PTT Public and Central Pattana
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PTT and Central is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and Central Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pattana 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 Central Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pattana Public has no effect on the direction of PTT Public i.e., PTT Public and Central Pattana go up and down completely randomly.
Pair Corralation between PTT Public and Central Pattana
Assuming the 90 days trading horizon PTT Public is expected to under-perform the Central Pattana. But the stock apears to be less risky and, when comparing its historical volatility, PTT Public is 1.51 times less risky than Central Pattana. The stock trades about 0.0 of its potential returns per unit of risk. The Central Pattana Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,525 in Central Pattana Public on September 26, 2024 and sell it today you would earn a total of 175.00 from holding Central Pattana Public or generate 3.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.18% |
Values | Daily Returns |
PTT Public vs. Central Pattana Public
Performance |
Timeline |
PTT Public |
Central Pattana Public |
PTT Public and Central Pattana Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PTT Public and Central Pattana
The main advantage of trading using opposite PTT Public and Central Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Public position performs unexpectedly, Central Pattana 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 Central Pattana will offset losses from the drop in Central Pattana's long position.The idea behind PTT Public and Central Pattana 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.Central Pattana vs. Bangkok Bank Public | Central Pattana vs. The Siam Cement | Central Pattana vs. PTT Public | Central Pattana vs. SCB X Public |
Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Equity Valuation Check real value of public entities based on technical and fundamental data |