Correlation Between PTT Public and United Paper

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

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

Diversification Opportunities for PTT Public and United Paper

-0.15

Correlation Coefficient

PTT Public  United Paper

Good diversification

The 3 months correlation between PTT and United is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PTT Public and United Paper Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Paper 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 United Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Paper Public has no effect on the direction of PTT Public i.e., PTT Public and United Paper go up and down completely randomly.

Pair Corralation between PTT Public and United Paper

Assuming the 90 days trading horizon PTT Public is expected to generate 2.33 times less return on investment than United Paper. In addition to that, PTT Public is 1.62 times more volatile than United Paper Public. It trades about 0.03 of its total potential returns per unit of risk. United Paper Public is currently generating about 0.13 per unit of volatility. If you would invest  742.00  in United Paper Public on December 21, 2024 and sell it today you would earn a total of  58.00  from holding United Paper Public or generate 7.82% return on investment over 90 days.

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

PTT Public  vs.  United Paper Public

PTT Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

United Paper Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Paper Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, United Paper may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PTT Public and United Paper

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

The idea behind PTT Public and United Paper 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.