Correlation Between Shin Etsu and PTT Global
Can any of the company-specific risk be diversified away by investing in both Shin Etsu and PTT Global 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 Shin Etsu and PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Etsu Chemical Co and PTT Global Chemical, you can compare the effects of market volatilities on Shin Etsu and PTT Global 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 Shin Etsu with a short position of PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin Etsu and PTT Global.
Diversification Opportunities for Shin Etsu and PTT Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shin and PTT is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical and Shin Etsu 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 Shin Etsu Chemical Co are associated (or correlated) with PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of Shin Etsu i.e., Shin Etsu and PTT Global go up and down completely randomly.
Pair Corralation between Shin Etsu and PTT Global
Assuming the 90 days horizon Shin Etsu Chemical Co is expected to generate 0.67 times more return on investment than PTT Global. However, Shin Etsu Chemical Co is 1.5 times less risky than PTT Global. It trades about -0.12 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.09 per unit of risk. If you would invest 3,590 in Shin Etsu Chemical Co on September 23, 2024 and sell it today you would lose (532.00) from holding Shin Etsu Chemical Co or give up 14.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Shin Etsu Chemical Co vs. PTT Global Chemical
Performance |
Timeline |
Shin Etsu Chemical |
PTT Global Chemical |
Shin Etsu and PTT Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shin Etsu and PTT Global
The main advantage of trading using opposite Shin Etsu and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Etsu position performs unexpectedly, PTT Global 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 PTT Global will offset losses from the drop in PTT Global's long position.Shin Etsu vs. Media and Games | Shin Etsu vs. GigaMedia | Shin Etsu vs. SPORTING | Shin Etsu vs. Fukuyama Transporting Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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