Correlation Between ALT Telecom and Thai Steel

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

By analyzing existing cross correlation between ALT Telecom Public and Thai Steel Cable, you can compare the effects of market volatilities on ALT Telecom and Thai Steel 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 ALT Telecom with a short position of Thai Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALT Telecom and Thai Steel.

Diversification Opportunities for ALT Telecom and Thai Steel

0.91

Correlation Coefficient

ALT Telecom  Thai Steel

Almost no diversification

The 3 months correlation between ALT and Thai is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ALT Telecom Public and Thai Steel Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Steel Cable and ALT Telecom 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 ALT Telecom Public are associated (or correlated) with Thai Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Steel Cable has no effect on the direction of ALT Telecom i.e., ALT Telecom and Thai Steel go up and down completely randomly.

Pair Corralation between ALT Telecom and Thai Steel

Assuming the 90 days trading horizon ALT Telecom Public is expected to under-perform the Thai Steel. In addition to that, ALT Telecom is 1.35 times more volatile than Thai Steel Cable. It trades about -0.21 of its total potential returns per unit of risk. Thai Steel Cable is currently generating about -0.11 per unit of volatility. If you would invest  1,485  in Thai Steel Cable on December 25, 2024 and sell it today you would lose (155.00) from holding Thai Steel Cable or give up 10.44% of portfolio value over 90 days.

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

ALT Telecom Public  vs.  Thai Steel Cable

ALT Telecom Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALT Telecom Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Thai Steel Cable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Steel Cable has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental 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 ALT Telecom and Thai Steel

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

The idea behind ALT Telecom Public and Thai Steel Cable 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.