Correlation Between Check Point and PTT Global

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

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

Diversification Opportunities for Check Point and PTT Global

-0.01

Correlation Coefficient

Check Point  PTT Global

Good diversification

The 3 months correlation between Check and PTT is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software 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 Check Point 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 Check Point Software 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 Check Point i.e., Check Point and PTT Global go up and down completely randomly.

Pair Corralation between Check Point and PTT Global

Assuming the 90 days trading horizon Check Point Software is expected to generate 0.78 times more return on investment than PTT Global. However, Check Point Software is 1.29 times less risky than PTT Global. It trades about 0.03 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.04 per unit of risk. If you would invest  17,155  in Check Point Software on September 12, 2024 and sell it today you would earn a total of  560.00  from holding Check Point Software or generate 3.26% return on investment over 90 days.

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

Check Point Software  vs.  PTT Global Chemical

Check Point Software

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Check Point Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Check Point is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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 comparatively stable basic indicators, PTT Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Check Point and PTT Global

The main advantage of trading using opposite Check Point and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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 Check Point Software 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.