Correlation Between 2S Metal and CENTRAL RETAIL
Can any of the company-specific risk be diversified away by investing in both 2S Metal and CENTRAL RETAIL 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 CENTRAL RETAIL 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 CENTRAL RETAIL P, you can compare the effects of market volatilities on 2S Metal and CENTRAL RETAIL 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 CENTRAL RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and CENTRAL RETAIL.
Diversification Opportunities for 2S Metal and CENTRAL RETAIL
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 2S Metal and CENTRAL is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and CENTRAL RETAIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRAL RETAIL P 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 CENTRAL RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRAL RETAIL P has no effect on the direction of 2S Metal i.e., 2S Metal and CENTRAL RETAIL go up and down completely randomly.
Pair Corralation between 2S Metal and CENTRAL RETAIL
Assuming the 90 days horizon 2S Metal Public is expected to generate 1.39 times more return on investment than CENTRAL RETAIL. However, 2S Metal is 1.39 times more volatile than CENTRAL RETAIL P. It trades about 0.02 of its potential returns per unit of risk. CENTRAL RETAIL P is currently generating about -0.06 per unit of risk. If you would invest 253.00 in 2S Metal Public on September 3, 2024 and sell it today you would earn a total of 25.00 from holding 2S Metal Public or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2S Metal Public vs. CENTRAL RETAIL P
Performance |
| Timeline |
| 2S Metal Public |
| CENTRAL RETAIL P |
2S Metal and CENTRAL RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and CENTRAL RETAIL
The main advantage of trading using opposite 2S Metal and CENTRAL RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, CENTRAL RETAIL 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 CENTRAL RETAIL will offset losses from the drop in CENTRAL RETAIL'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 |
| CENTRAL RETAIL vs. Central Retail | CENTRAL RETAIL vs. The Erawan Group | CENTRAL RETAIL vs. Autocorp Holding Public | CENTRAL RETAIL vs. XSpring Capital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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