Correlation Between PTT Public and NC Housing

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

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

Diversification Opportunities for PTT Public and NC Housing

0.82

Correlation Coefficient

PTT Public  NC Housing

Very poor diversification

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

Pair Corralation between PTT Public and NC Housing

Assuming the 90 days trading horizon PTT Public is expected to under-perform the NC Housing. In addition to that, PTT Public is 1.28 times more volatile than NC Housing Public. It trades about -0.31 of its total potential returns per unit of risk. NC Housing Public is currently generating about -0.18 per unit of volatility. If you would invest  73.00  in NC Housing Public on September 24, 2024 and sell it today you would lose (2.00) from holding NC Housing Public or give up 2.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.0%
Values	Daily Returns

PTT Public  vs.  NC Housing Public

PTT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

NC Housing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NC Housing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with PTT Public and NC Housing

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

The idea behind PTT Public and NC Housing 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.