Correlation Between MCS Steel and AEON Thana

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

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

Diversification Opportunities for MCS Steel and AEON Thana

0.21

Correlation Coefficient

MCS Steel  AEON Thana

Modest diversification

The 3 months correlation between MCS and AEON is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and AEON Thana Sinsap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON Thana Sinsap and MCS Steel 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 MCS Steel Public are associated (or correlated) with AEON Thana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON Thana Sinsap has no effect on the direction of MCS Steel i.e., MCS Steel and AEON Thana go up and down completely randomly.

Pair Corralation between MCS Steel and AEON Thana

Assuming the 90 days trading horizon MCS Steel Public is expected to generate 1.21 times more return on investment than AEON Thana. However, MCS Steel is 1.21 times more volatile than AEON Thana Sinsap. It trades about 0.32 of its potential returns per unit of risk. AEON Thana Sinsap is currently generating about -0.2 per unit of risk. If you would invest  610.00  in MCS Steel Public on December 4, 2024 and sell it today you would earn a total of  105.00  from holding MCS Steel Public or generate 17.21% return on investment over 90 days.

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

MCS Steel Public  vs.  AEON Thana Sinsap

MCS Steel Public

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MCS Steel Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, MCS Steel is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

AEON Thana Sinsap

Risk-Adjusted Performance

Very Weak

Over the last 90 days AEON Thana Sinsap 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MCS Steel and AEON Thana

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

The idea behind MCS Steel Public and AEON Thana Sinsap 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.