Correlation Between Bangkok Life and PTG Energy

Can any of the company-specific risk be diversified away by investing in both Bangkok Life 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 Bangkok Life and PTG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bangkok Life Assurance and PTG Energy Public, you can compare the effects of market volatilities on Bangkok Life 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 Bangkok Life with a short position of PTG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Life and PTG Energy.

Diversification Opportunities for Bangkok Life and PTG Energy

-0.05

Correlation Coefficient

Bangkok Life  PTG Energy

Good diversification

The 3 months correlation between Bangkok and PTG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Life Assurance and PTG Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTG Energy Public and Bangkok Life 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 Bangkok Life Assurance 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 Public has no effect on the direction of Bangkok Life i.e., Bangkok Life and PTG Energy go up and down completely randomly.

Pair Corralation between Bangkok Life and PTG Energy

Assuming the 90 days trading horizon Bangkok Life is expected to generate 1.02 times less return on investment than PTG Energy. In addition to that, Bangkok Life is 1.0 times more volatile than PTG Energy Public. It trades about 0.14 of its total potential returns per unit of risk. PTG Energy Public is currently generating about 0.14 per unit of volatility. If you would invest  1,029  in PTG Energy Public on September 13, 2024 and sell it today you would earn a total of  0.00  from holding PTG Energy Public or generate 0.0% return on investment over 90 days.

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

Bangkok Life Assurance  vs.  PTG Energy Public

Bangkok Life Assurance

Risk-Adjusted Performance

8 of 100

OK

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

PTG Energy Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PTG Energy Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, PTG Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bangkok Life and PTG Energy

The main advantage of trading using opposite Bangkok Life and PTG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Life 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 Bangkok Life Assurance and PTG Energy Public 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.