Correlation Between Samchai Steel and TPC Power
Can any of the company-specific risk be diversified away by investing in both Samchai Steel and TPC Power 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 Samchai Steel and TPC Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samchai Steel Industries and TPC Power Holding, you can compare the effects of market volatilities on Samchai Steel and TPC Power 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 Samchai Steel with a short position of TPC Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samchai Steel and TPC Power.
Diversification Opportunities for Samchai Steel and TPC Power
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samchai and TPC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Samchai Steel Industries and TPC Power Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPC Power Holding and Samchai 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 Samchai Steel Industries are associated (or correlated) with TPC Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPC Power Holding has no effect on the direction of Samchai Steel i.e., Samchai Steel and TPC Power go up and down completely randomly.
Pair Corralation between Samchai Steel and TPC Power
Assuming the 90 days trading horizon Samchai Steel Industries is expected to generate 23.62 times more return on investment than TPC Power. However, Samchai Steel is 23.62 times more volatile than TPC Power Holding. It trades about 0.04 of its potential returns per unit of risk. TPC Power Holding is currently generating about -0.02 per unit of risk. If you would invest 74.00 in Samchai Steel Industries on September 23, 2024 and sell it today you would lose (48.00) from holding Samchai Steel Industries or give up 64.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samchai Steel Industries vs. TPC Power Holding
Performance |
Timeline |
Samchai Steel Industries |
TPC Power Holding |
Samchai Steel and TPC Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samchai Steel and TPC Power
The main advantage of trading using opposite Samchai Steel and TPC Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samchai Steel position performs unexpectedly, TPC Power 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 TPC Power will offset losses from the drop in TPC Power's long position.Samchai Steel vs. Dynasty Ceramic Public | Samchai Steel vs. Chonburi Concrete Product | Samchai Steel vs. General Engineering Public | Samchai Steel vs. Eastern Star Real |
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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 Stocks Directory module to find actively traded stocks across global markets.
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