Correlation Between PTT Exploration and SNC Former

Can any of the company-specific risk be diversified away by investing in both PTT Exploration and SNC Former 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 SNC Former 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 SNC Former Public, you can compare the effects of market volatilities on PTT Exploration and SNC Former 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 SNC Former. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Exploration and SNC Former.

Diversification Opportunities for PTT Exploration and SNC Former

-0.58

Correlation Coefficient

PTT Exploration  SNC Former

Excellent diversification

The 3 months correlation between PTT and SNC is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and SNC Former Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC Former Public 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 SNC Former. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC Former Public has no effect on the direction of PTT Exploration i.e., PTT Exploration and SNC Former go up and down completely randomly.

Pair Corralation between PTT Exploration and SNC Former

Assuming the 90 days trading horizon PTT Exploration and is expected to under-perform the SNC Former. But the stock apears to be less risky and, when comparing its historical volatility, PTT Exploration and is 1.39 times less risky than SNC Former. The stock trades about -0.01 of its potential returns per unit of risk. The SNC Former Public is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  545.00  in SNC Former Public on December 21, 2024 and sell it today you would earn a total of  110.00  from holding SNC Former Public or generate 20.18% return on investment over 90 days.

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

PTT Exploration and  vs.  SNC Former Public

PTT Exploration

Risk-Adjusted Performance

Very 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.

SNC Former Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SNC Former Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, SNC Former disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Exploration and SNC Former

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

The idea behind PTT Exploration and and SNC Former 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.