Correlation Between 2S Metal and ALL ENERGY
Can any of the company-specific risk be diversified away by investing in both 2S Metal and ALL ENERGY 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 2S Metal and ALL ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2S Metal Public and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on 2S Metal and ALL ENERGY 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 2S Metal with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and ALL ENERGY.
Diversification Opportunities for 2S Metal and ALL ENERGY
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 2S Metal and ALL is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and 2S Metal 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 2S Metal Public are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of 2S Metal i.e., 2S Metal and ALL ENERGY go up and down completely randomly.
Pair Corralation between 2S Metal and ALL ENERGY
Assuming the 90 days horizon 2S Metal Public is expected to generate 0.4 times more return on investment than ALL ENERGY. However, 2S Metal Public is 2.51 times less risky than ALL ENERGY. It trades about -0.16 of its potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about -0.26 per unit of risk. If you would invest 294.00 in 2S Metal Public on August 31, 2024 and sell it today you would lose (16.00) from holding 2S Metal Public or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2S Metal Public vs. ALL ENERGY UTILITIES
Performance |
| Timeline |
| 2S Metal Public |
| ALL ENERGY UTILITIES |
2S Metal and ALL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and ALL ENERGY
The main advantage of trading using opposite 2S Metal and ALL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, ALL ENERGY 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 ALL ENERGY will offset losses from the drop in ALL ENERGY's long position.| 2S Metal vs. Diamond Building Products | 2S Metal vs. MCS Steel Public | 2S Metal vs. Asia Green Energy | 2S Metal vs. Hwa Fong Rubber |
| ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY vs. Lohakit Metal Public |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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