Correlation Between PTT PCL and Eni SpA

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

By analyzing existing cross correlation between PTT PCL ADR and Eni SpA, you can compare the effects of market volatilities on PTT PCL and Eni SpA 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 PCL with a short position of Eni SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT PCL and Eni SpA.

Diversification Opportunities for PTT PCL and Eni SpA

-0.08

Correlation Coefficient

PTT PCL  Eni SpA

Good diversification

The 3 months correlation between PTT and Eni is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PTT PCL ADR and Eni SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA and PTT PCL 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 PCL ADR are associated (or correlated) with Eni SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eni SpA has no effect on the direction of PTT PCL i.e., PTT PCL and Eni SpA go up and down completely randomly.

Pair Corralation between PTT PCL and Eni SpA

Assuming the 90 days horizon PTT PCL is expected to generate 1.81 times less return on investment than Eni SpA. But when comparing it to its historical volatility, PTT PCL ADR is 9.47 times less risky than Eni SpA. It trades about 0.12 of its potential returns per unit of risk. Eni SpA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,427  in Eni SpA on February 11, 2025 and sell it today you would lose (1.00) from holding Eni SpA or give up 0.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

PTT PCL ADR  vs.  Eni SpA

PTT PCL ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PTT PCL ADR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PTT PCL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eni SpA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eni SpA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Eni SpA may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with PTT PCL and Eni SpA

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

The idea behind PTT PCL ADR and Eni SpA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.