Correlation Between Thai Steel and KGI Securities

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

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

Diversification Opportunities for Thai Steel and KGI Securities

-0.33

Correlation Coefficient

Thai Steel  KGI Securities

Very good diversification

The 3 months correlation between Thai and KGI is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Thai Steel Cable and KGI Securities Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGI Securities Public and Thai 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 Thai Steel Cable are associated (or correlated) with KGI Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGI Securities Public has no effect on the direction of Thai Steel i.e., Thai Steel and KGI Securities go up and down completely randomly.

Pair Corralation between Thai Steel and KGI Securities

Assuming the 90 days trading horizon Thai Steel Cable is expected to under-perform the KGI Securities. In addition to that, Thai Steel is 2.57 times more volatile than KGI Securities Public. It trades about -0.15 of its total potential returns per unit of risk. KGI Securities Public is currently generating about 0.08 per unit of volatility. If you would invest  424.00  in KGI Securities Public on December 28, 2024 and sell it today you would earn a total of  12.00  from holding KGI Securities Public or generate 2.83% return on investment over 90 days.

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

Thai Steel Cable  vs.  KGI Securities Public

Thai Steel Cable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Steel Cable 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 fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

KGI Securities Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KGI Securities Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, KGI Securities is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Thai Steel and KGI Securities

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

The idea behind Thai Steel Cable and KGI Securities 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.