Correlation Between Rockworth Public and Siam Steel

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

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

Diversification Opportunities for Rockworth Public and Siam Steel

0.1

Correlation Coefficient

Rockworth Public  Siam Steel

Average diversification

The 3 months correlation between Rockworth and Siam is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Rockworth Public and Siam Steel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel International and Rockworth Public 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 Rockworth Public are associated (or correlated) with Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel International has no effect on the direction of Rockworth Public i.e., Rockworth Public and Siam Steel go up and down completely randomly.

Pair Corralation between Rockworth Public and Siam Steel

Assuming the 90 days trading horizon Rockworth Public is expected to generate 2.65 times more return on investment than Siam Steel. However, Rockworth Public is 2.65 times more volatile than Siam Steel International. It trades about 0.1 of its potential returns per unit of risk. Siam Steel International is currently generating about -0.17 per unit of risk. If you would invest  1,020  in Rockworth Public on October 9, 2024 and sell it today you would earn a total of  60.00  from holding Rockworth Public or generate 5.88% return on investment over 90 days.

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

Rockworth Public  vs.  Siam Steel International

Rockworth Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rockworth Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Rockworth Public may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Siam Steel International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Steel International 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Rockworth Public and Siam Steel

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

The idea behind Rockworth Public and Siam Steel International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.