Correlation Between PTT Exploration and WHA Industrial

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

Diversification Opportunities for PTT Exploration and WHA Industrial

-0.2

Correlation Coefficient

PTT Exploration  WHA Industrial

Good diversification

The 3 months correlation between PTT and WHA is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and WHA Industrial Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Industrial Leasehold 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 WHA Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Industrial Leasehold has no effect on the direction of PTT Exploration i.e., PTT Exploration and WHA Industrial go up and down completely randomly.

Pair Corralation between PTT Exploration and WHA Industrial

Assuming the 90 days trading horizon PTT Exploration and is expected to generate 1.37 times more return on investment than WHA Industrial. However, PTT Exploration is 1.37 times more volatile than WHA Industrial Leasehold. It trades about -0.05 of its potential returns per unit of risk. WHA Industrial Leasehold is currently generating about -0.1 per unit of risk. If you would invest  12,227  in PTT Exploration and on November 28, 2024 and sell it today you would lose (727.00) from holding PTT Exploration and or give up 5.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

PTT Exploration and  vs.  WHA Industrial Leasehold

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.

WHA Industrial Leasehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days WHA Industrial Leasehold 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.

Pair Trading with PTT Exploration and WHA Industrial

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

The idea behind PTT Exploration and and WHA Industrial Leasehold 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.