Correlation Between PTT Global and PTT Exploration

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

Diversification Opportunities for PTT Global and PTT Exploration

0.13

Correlation Coefficient

PTT Global  PTT Exploration

Average diversification

The 3 months correlation between PTT and PTT is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and PTT Exploration and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Exploration 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 PTT Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Exploration has no effect on the direction of PTT Global i.e., PTT Global and PTT Exploration go up and down completely randomly.

Pair Corralation between PTT Global and PTT Exploration

Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 31.48 times more return on investment than PTT Exploration. However, PTT Global is 31.48 times more volatile than PTT Exploration and. It trades about 0.04 of its potential returns per unit of risk. PTT Exploration and is currently generating about -0.02 per unit of risk. If you would invest  4,438  in PTT Global Chemical on September 1, 2024 and sell it today you would lose (1,913) from holding PTT Global Chemical or give up 43.11% of portfolio value over 90 days.

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

PTT Global Chemical  vs.  PTT Exploration and

PTT Global Chemical

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Global Chemical are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, PTT Global sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with PTT Global and PTT Exploration

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

The idea behind PTT Global Chemical and PTT Exploration and 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.