Correlation Between KGI Securities and Thai Steel

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

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

Diversification Opportunities for KGI Securities and Thai Steel

0.18

Correlation Coefficient

KGI Securities  Thai Steel

Average diversification

The 3 months correlation between KGI and Thai is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities 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 KGI Securities 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 KGI Securities 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 KGI Securities i.e., KGI Securities and Thai Steel go up and down completely randomly.

Pair Corralation between KGI Securities and Thai Steel

Assuming the 90 days trading horizon KGI Securities Public is expected to under-perform the Thai Steel. But the stock apears to be less risky and, when comparing its historical volatility, KGI Securities Public is 84.32 times less risky than Thai Steel. The stock trades about -0.04 of its potential returns per unit of risk. The Thai Steel Cable is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,430  in Thai Steel Cable on September 3, 2024 and sell it today you would earn a total of  50.00  from holding Thai Steel Cable or generate 3.5% return on investment over 90 days.

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

KGI Securities Public  vs.  Thai Steel Cable

KGI Securities Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Thai Steel Cable

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Steel Cable are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Thai Steel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KGI Securities and Thai Steel

The main advantage of trading using opposite KGI Securities and Thai Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGI Securities 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 KGI Securities 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.