Correlation Between PTT Exploration and Thachang Green

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

Diversification Opportunities for PTT Exploration and Thachang Green

0.61

Correlation Coefficient

PTT Exploration  Thachang Green

Poor diversification

The 3 months correlation between PTT and Thachang is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and Thachang Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thachang Green Energy 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 Thachang Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thachang Green Energy has no effect on the direction of PTT Exploration i.e., PTT Exploration and Thachang Green go up and down completely randomly.

Pair Corralation between PTT Exploration and Thachang Green

Assuming the 90 days trading horizon PTT Exploration and is expected to under-perform the Thachang Green. But the stock apears to be less risky and, when comparing its historical volatility, PTT Exploration and is 3.24 times less risky than Thachang Green. The stock trades about -0.02 of its potential returns per unit of risk. The Thachang Green Energy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  202.00  in Thachang Green Energy on September 12, 2024 and sell it today you would earn a total of  28.00  from holding Thachang Green Energy or generate 13.86% 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.  Thachang Green Energy

PTT Exploration

Risk-Adjusted Performance

0 of 100

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 latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Thachang Green Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thachang Green Energy 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 technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 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 Thachang Green

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

The idea behind PTT Exploration and and Thachang Green Energy 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.