Correlation Between PTT Exploration and AIRA Capital

Can any of the company-specific risk be diversified away by investing in both PTT Exploration and AIRA Capital 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 AIRA Capital 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 AIRA Capital Public, you can compare the effects of market volatilities on PTT Exploration and AIRA Capital 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 AIRA Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Exploration and AIRA Capital.

Diversification Opportunities for PTT Exploration and AIRA Capital

0.74

Correlation Coefficient

PTT Exploration  AIRA Capital

Poor diversification

The 3 months correlation between PTT and AIRA is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and AIRA Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRA Capital 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 AIRA Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRA Capital Public has no effect on the direction of PTT Exploration i.e., PTT Exploration and AIRA Capital go up and down completely randomly.

Pair Corralation between PTT Exploration and AIRA Capital

Assuming the 90 days trading horizon PTT Exploration and is expected to generate 0.47 times more return on investment than AIRA Capital. However, PTT Exploration and is 2.13 times less risky than AIRA Capital. It trades about -0.11 of its potential returns per unit of risk. AIRA Capital Public is currently generating about -0.09 per unit of risk. If you would invest  13,700  in PTT Exploration and on September 14, 2024 and sell it today you would lose (1,400) from holding PTT Exploration and or give up 10.22% of portfolio value over 90 days.

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

PTT Exploration and  vs.  AIRA Capital Public

PTT Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Exploration and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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.

AIRA Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIRA Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals 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.

Pair Trading with PTT Exploration and AIRA Capital

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

The idea behind PTT Exploration and and AIRA Capital 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.