Correlation Between Somboon Advance and PTG Energy

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Can any of the company-specific risk be diversified away by investing in both Somboon Advance 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 Somboon Advance and PTG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Somboon Advance Technology and PTG Energy PCL, you can compare the effects of market volatilities on Somboon Advance 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 Somboon Advance with a short position of PTG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Somboon Advance and PTG Energy.

Diversification Opportunities for Somboon Advance and PTG Energy

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Somboon and PTG is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Somboon Advance Technology 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 Somboon Advance 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 Somboon Advance Technology 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 Somboon Advance i.e., Somboon Advance and PTG Energy go up and down completely randomly.

Pair Corralation between Somboon Advance and PTG Energy

Assuming the 90 days trading horizon Somboon Advance Technology is expected to generate 1.09 times more return on investment than PTG Energy. However, Somboon Advance is 1.09 times more volatile than PTG Energy PCL. It trades about 0.12 of its potential returns per unit of risk. PTG Energy PCL is currently generating about -0.09 per unit of risk. If you would invest  979.00  in Somboon Advance Technology on December 26, 2024 and sell it today you would earn a total of  161.00  from holding Somboon Advance Technology or generate 16.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.39%
ValuesDaily Returns

Somboon Advance Technology  vs.  PTG Energy PCL

 Performance 
       Timeline  
Somboon Advance Tech 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Somboon Advance Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Somboon Advance disclosed solid returns over the last few months and may actually be approaching a breakup point.
PTG Energy PCL 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.

Somboon Advance and PTG Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Somboon Advance and PTG Energy

The main advantage of trading using opposite Somboon Advance and PTG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Somboon Advance 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 Somboon Advance Technology 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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