Correlation Between PTT Oil and Phol Dhanya

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

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

Diversification Opportunities for PTT Oil and Phol Dhanya

0.82

Correlation Coefficient

PTT Oil  Phol Dhanya

Very poor diversification

The 3 months correlation between PTT and Phol is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PTT Oil and and Phol Dhanya Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phol Dhanya Public and PTT Oil 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 Oil and are associated (or correlated) with Phol Dhanya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phol Dhanya Public has no effect on the direction of PTT Oil i.e., PTT Oil and Phol Dhanya go up and down completely randomly.

Pair Corralation between PTT Oil and Phol Dhanya

Assuming the 90 days horizon PTT Oil and is expected to under-perform the Phol Dhanya. In addition to that, PTT Oil is 1.58 times more volatile than Phol Dhanya Public. It trades about -0.2 of its total potential returns per unit of risk. Phol Dhanya Public is currently generating about -0.08 per unit of volatility. If you would invest  320.00  in Phol Dhanya Public on September 14, 2024 and sell it today you would lose (16.00) from holding Phol Dhanya Public or give up 5.0% of portfolio value over 90 days.

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

PTT Oil and  vs.  Phol Dhanya Public

PTT Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Oil and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Phol Dhanya Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phol Dhanya Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Phol Dhanya is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with PTT Oil and Phol Dhanya

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

The idea behind PTT Oil and and Phol Dhanya 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.