Correlation Between PTT Exploration and MK Real

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

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

Diversification Opportunities for PTT Exploration and MK Real

0.36

Correlation Coefficient

PTT Exploration  MK Real

Weak diversification

The 3 months correlation between PTT and MK Real is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and MK Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MK Real Estate and PTT Exploration 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 Exploration and are associated (or correlated) with MK Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MK Real Estate has no effect on the direction of PTT Exploration i.e., PTT Exploration and MK Real go up and down completely randomly.

Pair Corralation between PTT Exploration and MK Real

Assuming the 90 days trading horizon PTT Exploration and is expected to generate 0.65 times more return on investment than MK Real. However, PTT Exploration and is 1.54 times less risky than MK Real. It trades about -0.02 of its potential returns per unit of risk. MK Real Estate is currently generating about -0.04 per unit of risk. If you would invest  15,162  in PTT Exploration and on October 22, 2024 and sell it today you would lose (2,512) from holding PTT Exploration and or give up 16.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

PTT Exploration and  vs.  MK Real Estate

PTT Exploration

Risk-Adjusted Performance

0 of 100

Weak

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

MK Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MK Real Estate 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PTT Exploration and MK Real

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

The idea behind PTT Exploration and and MK Real Estate 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..