Correlation Between Banpu Public and PTT Global

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

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

Diversification Opportunities for Banpu Public and PTT Global

0.54

Correlation Coefficient

Banpu Public  PTT Global

Very weak diversification

The 3 months correlation between Banpu and PTT is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Banpu Public 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 Banpu Public 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 Banpu Public 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 Banpu Public i.e., Banpu Public and PTT Global go up and down completely randomly.

Pair Corralation between Banpu Public and PTT Global

Assuming the 90 days trading horizon Banpu Public is expected to generate 0.93 times more return on investment than PTT Global. However, Banpu Public is 1.07 times less risky than PTT Global. It trades about 0.06 of its potential returns per unit of risk. PTT Global Chemical is currently generating about 0.01 per unit of risk. If you would invest  534.00  in Banpu Public on September 4, 2024 and sell it today you would earn a total of  46.00  from holding Banpu Public or generate 8.61% return on investment over 90 days.

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

Banpu Public  vs.  PTT Global Chemical

Banpu Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banpu Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Banpu Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PTT Global Chemical

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Global Chemical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, PTT Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banpu Public and PTT Global

The main advantage of trading using opposite Banpu Public and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banpu Public 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 Banpu Public 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.