Correlation Between PTT Global and Meta Platforms

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

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

Diversification Opportunities for PTT Global and Meta Platforms

-0.3

Correlation Coefficient

PTT Global  Meta Platforms

Very good diversification

The 3 months correlation between PTT and Meta is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and PTT Global 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 PTT Global Chemical are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of PTT Global i.e., PTT Global and Meta Platforms go up and down completely randomly.

Pair Corralation between PTT Global and Meta Platforms

Assuming the 90 days trading horizon PTT Global Chemical is expected to under-perform the Meta Platforms. In addition to that, PTT Global is 1.66 times more volatile than Meta Platforms. It trades about -0.01 of its total potential returns per unit of risk. Meta Platforms is currently generating about 0.21 per unit of volatility. If you would invest  46,531  in Meta Platforms on September 5, 2024 and sell it today you would earn a total of  11,309  from holding Meta Platforms or generate 24.3% return on investment over 90 days.

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

PTT Global Chemical  vs.  Meta Platforms

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.

Meta Platforms

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Meta Platforms exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTT Global and Meta Platforms

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

The idea behind PTT Global Chemical and Meta Platforms 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.