Correlation Between Communication System and PTT OIL

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

By analyzing existing cross correlation between Communication System Solution and PTT OIL RETAIL, you can compare the effects of market volatilities on Communication System and PTT OIL 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 Communication System with a short position of PTT OIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication System and PTT OIL.

Diversification Opportunities for Communication System and PTT OIL

0.39

Correlation Coefficient

Communication System  PTT OIL

Weak diversification

The 3 months correlation between Communication and PTT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Communication System Solution and PTT OIL RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL RETAIL and Communication System 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 Communication System Solution are associated (or correlated) with PTT OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL RETAIL has no effect on the direction of Communication System i.e., Communication System and PTT OIL go up and down completely randomly.

Pair Corralation between Communication System and PTT OIL

Assuming the 90 days trading horizon Communication System is expected to generate 21.27 times less return on investment than PTT OIL. In addition to that, Communication System is 1.04 times more volatile than PTT OIL RETAIL. It trades about 0.01 of its total potential returns per unit of risk. PTT OIL RETAIL is currently generating about 0.17 per unit of volatility. If you would invest  1,129  in PTT OIL RETAIL on May 8, 2025 and sell it today you would earn a total of  181.00  from holding PTT OIL RETAIL or generate 16.03% return on investment over 90 days.

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

Communication System Solution  vs.  PTT OIL RETAIL

Communication System

Risk-Adjusted Performance

Weakest

Over the last 90 days Communication System Solution has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Communication System is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PTT OIL RETAIL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PTT OIL RETAIL are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, PTT OIL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Communication System and PTT OIL

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

The idea behind Communication System Solution and PTT OIL RETAIL 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.