Correlation Between Bangkok Sheet and KC Metalsheet

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Can any of the company-specific risk be diversified away by investing in both Bangkok Sheet and KC Metalsheet 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 Bangkok Sheet and KC Metalsheet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Sheet Metal and KC Metalsheet Public, you can compare the effects of market volatilities on Bangkok Sheet and KC Metalsheet 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 Bangkok Sheet with a short position of KC Metalsheet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Sheet and KC Metalsheet.

Diversification Opportunities for Bangkok Sheet and KC Metalsheet

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bangkok and KCM is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Sheet Metal and KC Metalsheet Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KC Metalsheet Public and Bangkok Sheet 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 Bangkok Sheet Metal are associated (or correlated) with KC Metalsheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KC Metalsheet Public has no effect on the direction of Bangkok Sheet i.e., Bangkok Sheet and KC Metalsheet go up and down completely randomly.

Pair Corralation between Bangkok Sheet and KC Metalsheet

Assuming the 90 days horizon Bangkok Sheet Metal is expected to generate 0.19 times more return on investment than KC Metalsheet. However, Bangkok Sheet Metal is 5.16 times less risky than KC Metalsheet. It trades about -0.2 of its potential returns per unit of risk. KC Metalsheet Public is currently generating about -0.26 per unit of risk. If you would invest  310.00  in Bangkok Sheet Metal on October 20, 2024 and sell it today you would lose (12.00) from holding Bangkok Sheet Metal or give up 3.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bangkok Sheet Metal  vs.  KC Metalsheet Public

 Performance 
       Timeline  
Bangkok Sheet Metal 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Bangkok Sheet Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
KC Metalsheet Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KC Metalsheet Public 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 primary indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bangkok Sheet and KC Metalsheet Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bangkok Sheet and KC Metalsheet

The main advantage of trading using opposite Bangkok Sheet and KC Metalsheet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Sheet position performs unexpectedly, KC Metalsheet 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 KC Metalsheet will offset losses from the drop in KC Metalsheet's long position.
The idea behind Bangkok Sheet Metal and KC Metalsheet 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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