Correlation Between Ngern Tid and PTT Oil

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

By analyzing existing cross correlation between Ngern Tid Lor and PTT Oil and, you can compare the effects of market volatilities on Ngern Tid and PTT Oil 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 Ngern Tid with a short position of PTT Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ngern Tid and PTT Oil.

Diversification Opportunities for Ngern Tid and PTT Oil

0.32

Correlation Coefficient

Ngern Tid  PTT Oil

Weak diversification

The 3 months correlation between Ngern and PTT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ngern Tid Lor and PTT Oil and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Oil and Ngern Tid 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 Ngern Tid Lor are associated (or correlated) with PTT Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Oil has no effect on the direction of Ngern Tid i.e., Ngern Tid and PTT Oil go up and down completely randomly.

Pair Corralation between Ngern Tid and PTT Oil

Assuming the 90 days trading horizon Ngern Tid Lor is expected to under-perform the PTT Oil. In addition to that, Ngern Tid is 1.08 times more volatile than PTT Oil and. It trades about -0.07 of its total potential returns per unit of risk. PTT Oil and is currently generating about -0.05 per unit of volatility. If you would invest  1,317  in PTT Oil and on December 29, 2024 and sell it today you would lose (127.00) from holding PTT Oil and or give up 9.64% of portfolio value over 90 days.

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

Ngern Tid Lor  vs.  PTT Oil and

Ngern Tid Lor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ngern Tid Lor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

PTT Oil

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTT Oil 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 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 Ngern Tid and PTT Oil

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

The idea behind Ngern Tid Lor and PTT Oil 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.