Correlation Between PTT Exploration and Hess

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

By analyzing existing cross correlation between PTT Exploration Production and Hess Corporation, you can compare the effects of market volatilities on PTT Exploration and Hess 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 Hess. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Exploration and Hess.

Diversification Opportunities for PTT Exploration and Hess

-0.55

Correlation Coefficient

PTT Exploration  Hess

Excellent diversification

The 3 months correlation between PTT and Hess is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PTT Exploration Production and Hess Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess 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 Production are associated (or correlated) with Hess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hess has no effect on the direction of PTT Exploration i.e., PTT Exploration and Hess go up and down completely randomly.

Pair Corralation between PTT Exploration and Hess

Assuming the 90 days horizon PTT Exploration Production is expected to under-perform the Hess. In addition to that, PTT Exploration is 9.74 times more volatile than Hess Corporation. It trades about -0.06 of its total potential returns per unit of risk. Hess Corporation is currently generating about 0.2 per unit of volatility. If you would invest  15,138  in Hess Corporation on January 25, 2024 and sell it today you would earn a total of  691.00  from holding Hess Corporation or generate 4.56% return on investment over 90 days.

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

PTT Exploration Production  vs.  Hess Corp.

PTT Exploration Prod

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Exploration Production has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Hess

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hess Corporation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Hess may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with PTT Exploration and Hess

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

The idea behind PTT Exploration Production and Hess Corporation 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.