Correlation Between Steel Public and Teka Construction
Can any of the company-specific risk be diversified away by investing in both Steel Public and Teka Construction 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 Steel Public and Teka Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Steel Public and Teka Construction PCL, you can compare the effects of market volatilities on Steel Public and Teka Construction 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 Steel Public with a short position of Teka Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Public and Teka Construction.
Diversification Opportunities for Steel Public and Teka Construction
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Steel and Teka is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding The Steel Public and Teka Construction PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teka Construction PCL and Steel 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 The Steel Public are associated (or correlated) with Teka Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teka Construction PCL has no effect on the direction of Steel Public i.e., Steel Public and Teka Construction go up and down completely randomly.
Pair Corralation between Steel Public and Teka Construction
Assuming the 90 days trading horizon The Steel Public is expected to generate 1.11 times more return on investment than Teka Construction. However, Steel Public is 1.11 times more volatile than Teka Construction PCL. It trades about 0.04 of its potential returns per unit of risk. Teka Construction PCL is currently generating about 0.01 per unit of risk. If you would invest 72.00 in The Steel Public on December 1, 2024 and sell it today you would earn a total of 3.00 from holding The Steel Public or generate 4.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.67% |
Values | Daily Returns |
The Steel Public vs. Teka Construction PCL
Performance |
Timeline |
Steel Public |
Teka Construction PCL |
Steel Public and Teka Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steel Public and Teka Construction
The main advantage of trading using opposite Steel Public and Teka Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Public position performs unexpectedly, Teka Construction 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 Teka Construction will offset losses from the drop in Teka Construction's long position.Steel Public vs. TMT Steel Public | Steel Public vs. Tycoons Worldwide Group | Steel Public vs. Thai German Products Public | Steel Public vs. Siam Steel Service |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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