Correlation Between PTT Global and PTG Energy

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

By analyzing existing cross correlation between PTT Global Chemical and PTG Energy PCL, you can compare the effects of market volatilities on PTT Global and PTG Energy 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 Global with a short position of PTG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and PTG Energy.

Diversification Opportunities for PTT Global and PTG Energy

0.82

Correlation Coefficient

PTT Global  PTG Energy

Very poor diversification

The 3 months correlation between PTT and PTG is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and PTG Energy PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTG Energy PCL and PTT Global 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 Global Chemical are associated (or correlated) with PTG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTG Energy PCL has no effect on the direction of PTT Global i.e., PTT Global and PTG Energy go up and down completely randomly.

Pair Corralation between PTT Global and PTG Energy

Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the PTG Energy. In addition to that, PTT Global is 1.68 times more volatile than PTG Energy PCL. It trades about -0.11 of its total potential returns per unit of risk. PTG Energy PCL is currently generating about -0.09 per unit of volatility. If you would invest  792.00  in PTG Energy PCL on December 28, 2024 and sell it today you would lose (97.00) from holding PTG Energy PCL or give up 12.25% of portfolio value over 90 days.

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

PTT Global Chemical  vs.  PTG Energy PCL

PTT Global Chemical

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTT Global Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PTG Energy PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTG Energy PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with PTT Global and PTG Energy

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

The idea behind PTT Global Chemical and PTG Energy PCL 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.