Correlation Between Millcon Steel and Internet Thailand

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

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

Diversification Opportunities for Millcon Steel and Internet Thailand

-0.23

Correlation Coefficient

Millcon Steel  Internet Thailand

Very good diversification

The 3 months correlation between Millcon and Internet is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Millcon Steel Public and Internet Thailand Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand Public and Millcon 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 Millcon Steel Public are associated (or correlated) with Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand Public has no effect on the direction of Millcon Steel i.e., Millcon Steel and Internet Thailand go up and down completely randomly.

Pair Corralation between Millcon Steel and Internet Thailand

Assuming the 90 days trading horizon Millcon Steel Public is expected to generate 18.28 times more return on investment than Internet Thailand. However, Millcon Steel is 18.28 times more volatile than Internet Thailand Public. It trades about 0.03 of its potential returns per unit of risk. Internet Thailand Public is currently generating about 0.01 per unit of risk. If you would invest  79.00  in Millcon Steel Public on October 11, 2024 and sell it today you would lose (70.00) from holding Millcon Steel Public or give up 88.61% of portfolio value over 90 days.

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

Millcon Steel Public  vs.  Internet Thailand Public

Millcon Steel Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Internet Thailand Public

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Thailand Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Internet Thailand disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Millcon Steel and Internet Thailand

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

The idea behind Millcon Steel Public and Internet Thailand Public 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.