Correlation Between PTG Energy and CH Karnchang
Can any of the company-specific risk be diversified away by investing in both PTG Energy and CH Karnchang 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 PTG Energy and CH Karnchang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTG Energy PCL and CH Karnchang Public, you can compare the effects of market volatilities on PTG Energy and CH Karnchang 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 PTG Energy with a short position of CH Karnchang. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTG Energy and CH Karnchang.
Diversification Opportunities for PTG Energy and CH Karnchang
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PTG and CH Karnchang is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PTG Energy PCL and CH Karnchang Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Karnchang Public and PTG Energy 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 PTG Energy PCL are associated (or correlated) with CH Karnchang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Karnchang Public has no effect on the direction of PTG Energy i.e., PTG Energy and CH Karnchang go up and down completely randomly.
Pair Corralation between PTG Energy and CH Karnchang
Assuming the 90 days trading horizon PTG Energy PCL is expected to generate 0.9 times more return on investment than CH Karnchang. However, PTG Energy PCL is 1.11 times less risky than CH Karnchang. It trades about 0.01 of its potential returns per unit of risk. CH Karnchang Public is currently generating about -0.02 per unit of risk. If you would invest 826.00 in PTG Energy PCL on September 15, 2024 and sell it today you would earn a total of 4.00 from holding PTG Energy PCL or generate 0.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PTG Energy PCL vs. CH Karnchang Public
Performance |
Timeline |
PTG Energy PCL |
CH Karnchang Public |
PTG Energy and CH Karnchang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PTG Energy and CH Karnchang
The main advantage of trading using opposite PTG Energy and CH Karnchang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTG Energy position performs unexpectedly, CH Karnchang 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 CH Karnchang will offset losses from the drop in CH Karnchang's long position.PTG Energy vs. PTT Exploration and | PTG Energy vs. Global Power Synergy | PTG Energy vs. PTT Global Chemical | PTG Energy vs. Gulf Energy Development |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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