Correlation Between Bank of Ayudhya and City Steel
Can any of the company-specific risk be diversified away by investing in both Bank of Ayudhya and City Steel 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 Bank of Ayudhya and City Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Ayudhya and City Steel Public, you can compare the effects of market volatilities on Bank of Ayudhya and City Steel 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 Bank of Ayudhya with a short position of City Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Ayudhya and City Steel.
Diversification Opportunities for Bank of Ayudhya and City Steel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and City is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ayudhya and City Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Steel Public and Bank of Ayudhya 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 Bank of Ayudhya are associated (or correlated) with City Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Steel Public has no effect on the direction of Bank of Ayudhya i.e., Bank of Ayudhya and City Steel go up and down completely randomly.
Pair Corralation between Bank of Ayudhya and City Steel
Assuming the 90 days trading horizon Bank of Ayudhya is expected to under-perform the City Steel. But the stock apears to be less risky and, when comparing its historical volatility, Bank of Ayudhya is 35.35 times less risky than City Steel. The stock trades about -0.02 of its potential returns per unit of risk. The City Steel Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 208.00 in City Steel Public on September 3, 2024 and sell it today you would lose (22.00) from holding City Steel Public or give up 10.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Ayudhya vs. City Steel Public
Performance |
| Timeline |
| Bank of Ayudhya |
| City Steel Public |
Bank of Ayudhya and City Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Ayudhya and City Steel
The main advantage of trading using opposite Bank of Ayudhya and City Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ayudhya position performs unexpectedly, City Steel 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 City Steel will offset losses from the drop in City Steel's long position.| Bank of Ayudhya vs. Thai Steel Cable | Bank of Ayudhya vs. Tropical Canning Public | Bank of Ayudhya vs. RB Food Supply | Bank of Ayudhya vs. Eureka Design Public |
| City Steel vs. Capital Engineering Network | City Steel vs. Bangsaphan Barmill Public | City Steel vs. CSP Steel Center | City Steel vs. Gratitude Infinite 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |