Correlation Between PTT Exploration and Union Auction

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

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

Diversification Opportunities for PTT Exploration and Union Auction

0.02

Correlation Coefficient

PTT Exploration  Union Auction

Significant diversification

The 3 months correlation between PTT and Union is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and Union Auction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Auction Public and PTT Exploration 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 Exploration and are associated (or correlated) with Union Auction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Auction Public has no effect on the direction of PTT Exploration i.e., PTT Exploration and Union Auction go up and down completely randomly.

Pair Corralation between PTT Exploration and Union Auction

Assuming the 90 days trading horizon PTT Exploration and is expected to generate 125.27 times more return on investment than Union Auction. However, PTT Exploration is 125.27 times more volatile than Union Auction Public. It trades about 0.11 of its potential returns per unit of risk. Union Auction Public is currently generating about -0.19 per unit of risk. If you would invest  15,471  in PTT Exploration and on September 13, 2024 and sell it today you would lose (2,971) from holding PTT Exploration and or give up 19.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

PTT Exploration and  vs.  Union Auction Public

PTT Exploration

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Exploration and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, PTT Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

Union Auction Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Auction Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals 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 Exploration and Union Auction

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

The idea behind PTT Exploration and and Union Auction 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.