Correlation Between PTT Exploration and Siam Steel

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

Diversification Opportunities for PTT Exploration and Siam Steel

0.6

Correlation Coefficient

PTT Exploration  Siam Steel

Poor diversification

The 3 months correlation between PTT and Siam is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and Siam Steel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel Service 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 Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel Service has no effect on the direction of PTT Exploration i.e., PTT Exploration and Siam Steel go up and down completely randomly.

Pair Corralation between PTT Exploration and Siam Steel

Assuming the 90 days trading horizon PTT Exploration and is expected to generate 0.83 times more return on investment than Siam Steel. However, PTT Exploration and is 1.2 times less risky than Siam Steel. It trades about 0.01 of its potential returns per unit of risk. Siam Steel Service is currently generating about -0.13 per unit of risk. If you would invest  12,600  in PTT Exploration and on October 22, 2024 and sell it today you would earn a total of  50.00  from holding PTT Exploration and or generate 0.4% return on investment over 90 days.

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

PTT Exploration and  vs.  Siam Steel Service

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.

Siam Steel Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Steel Service 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 forward-looking signals 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 Siam Steel

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

The idea behind PTT Exploration and and Siam Steel Service 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.