Correlation Between National Beverage and PTT Global

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

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

Diversification Opportunities for National Beverage and PTT Global

-0.59

Correlation Coefficient

National Beverage  PTT Global

Excellent diversification

The 3 months correlation between National and PTT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical and National Beverage 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 National Beverage Corp are associated (or correlated) with PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of National Beverage i.e., National Beverage and PTT Global go up and down completely randomly.

Pair Corralation between National Beverage and PTT Global

Assuming the 90 days horizon National Beverage is expected to generate 15.58 times less return on investment than PTT Global. But when comparing it to its historical volatility, National Beverage Corp is 9.17 times less risky than PTT Global. It trades about 0.02 of its potential returns per unit of risk. PTT Global Chemical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  97.00  in PTT Global Chemical on September 23, 2024 and sell it today you would lose (37.00) from holding PTT Global Chemical or give up 38.14% of portfolio value over 90 days.

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

National Beverage Corp  vs.  PTT Global Chemical

National Beverage Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Beverage Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, National Beverage is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

PTT Global Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Global Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with National Beverage and PTT Global

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

The idea behind National Beverage Corp and PTT Global Chemical 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.