Correlation Between PTT Exploration and ARIP Public

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

Diversification Opportunities for PTT Exploration and ARIP Public

-0.22

Correlation Coefficient

PTT Exploration  ARIP Public

Very good diversification

The 3 months correlation between PTT and ARIP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration and and ARIP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARIP 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 ARIP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARIP Public has no effect on the direction of PTT Exploration i.e., PTT Exploration and ARIP Public go up and down completely randomly.

Pair Corralation between PTT Exploration and ARIP Public

Assuming the 90 days trading horizon PTT Exploration and is expected to generate 0.45 times more return on investment than ARIP Public. However, PTT Exploration and is 2.2 times less risky than ARIP Public. It trades about 0.05 of its potential returns per unit of risk. ARIP Public is currently generating about -0.05 per unit of risk. If you would invest  13,170  in PTT Exploration and on February 14, 2024 and sell it today you would earn a total of  2,230  from holding PTT Exploration and or generate 16.93% return on investment over 90 days.

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

PTT Exploration and  vs.  ARIP Public

PTT Exploration

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Exploration and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PTT Exploration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ARIP Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARIP Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic 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 Exploration and ARIP Public

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

The idea behind PTT Exploration and and ARIP 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.