Correlation Between TKrungthai Industries and Steel Public
Can any of the company-specific risk be diversified away by investing in both TKrungthai Industries and Steel Public 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 TKrungthai Industries and Steel Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKrungthai Industries Public and The Steel Public, you can compare the effects of market volatilities on TKrungthai Industries and Steel Public 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 TKrungthai Industries with a short position of Steel Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKrungthai Industries and Steel Public.
Diversification Opportunities for TKrungthai Industries and Steel Public
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TKrungthai and Steel is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding TKrungthai Industries Public and The Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Public and TKrungthai Industries 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 TKrungthai Industries Public are associated (or correlated) with Steel Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Public has no effect on the direction of TKrungthai Industries i.e., TKrungthai Industries and Steel Public go up and down completely randomly.
Pair Corralation between TKrungthai Industries and Steel Public
Assuming the 90 days trading horizon TKrungthai Industries Public is expected to under-perform the Steel Public. In addition to that, TKrungthai Industries is 1.02 times more volatile than The Steel Public. It trades about -0.19 of its total potential returns per unit of risk. The Steel Public is currently generating about -0.06 per unit of volatility. If you would invest 76.00 in The Steel Public on December 30, 2024 and sell it today you would lose (10.00) from holding The Steel Public or give up 13.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TKrungthai Industries Public vs. The Steel Public
Performance |
Timeline |
TKrungthai Industries |
Steel Public |
TKrungthai Industries and Steel Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TKrungthai Industries and Steel Public
The main advantage of trading using opposite TKrungthai Industries and Steel Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKrungthai Industries position performs unexpectedly, Steel Public 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 Steel Public will offset losses from the drop in Steel Public's long position.TKrungthai Industries vs. Thai Nam Plastic | TKrungthai Industries vs. TCM Public | TKrungthai Industries vs. S Pack Print | TKrungthai Industries vs. Thai Reinsurance Public |
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 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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