Correlation Between Muang Thai and PTT Global

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

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

Diversification Opportunities for Muang Thai and PTT Global

0.76

Correlation Coefficient

Muang Thai  PTT Global

Poor diversification

The 3 months correlation between Muang and PTT is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Muang Thai Insurance 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 Muang Thai 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 Muang Thai Insurance 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 Muang Thai i.e., Muang Thai and PTT Global go up and down completely randomly.

Pair Corralation between Muang Thai and PTT Global

Assuming the 90 days trading horizon Muang Thai Insurance is expected to generate 0.89 times more return on investment than PTT Global. However, Muang Thai Insurance is 1.13 times less risky than PTT Global. It trades about 0.25 of its potential returns per unit of risk. PTT Global Chemical is currently generating about 0.11 per unit of risk. If you would invest  1,080  in Muang Thai Insurance on April 23, 2025 and sell it today you would earn a total of  500.00  from holding Muang Thai Insurance or generate 46.3% return on investment over 90 days.

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

Muang Thai Insurance  vs.  PTT Global Chemical

Muang Thai Insurance

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Muang Thai Insurance are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Muang Thai disclosed solid returns over the last few months and may actually be approaching a breakup point.

PTT Global Chemical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PTT Global Chemical are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, PTT Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Muang Thai and PTT Global

The main advantage of trading using opposite Muang Thai and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muang Thai 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.

The idea behind Muang Thai Insurance and PTT Global Chemical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..