Correlation Between Bangsaphan Barmill and City Steel
Can any of the company-specific risk be diversified away by investing in both Bangsaphan Barmill 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 Bangsaphan Barmill and City Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangsaphan Barmill Public and City Steel Public, you can compare the effects of market volatilities on Bangsaphan Barmill 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 Bangsaphan Barmill with a short position of City Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangsaphan Barmill and City Steel.
Diversification Opportunities for Bangsaphan Barmill and City Steel
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bangsaphan and City is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bangsaphan Barmill Public 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 Bangsaphan Barmill 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 Bangsaphan Barmill Public 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 Bangsaphan Barmill i.e., Bangsaphan Barmill and City Steel go up and down completely randomly.
Pair Corralation between Bangsaphan Barmill and City Steel
Assuming the 90 days trading horizon Bangsaphan Barmill Public is expected to under-perform the City Steel. But the stock apears to be less risky and, when comparing its historical volatility, Bangsaphan Barmill Public is 1.02 times less risky than City Steel. The stock trades about -0.07 of its potential returns per unit of risk. The City Steel Public is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 187.00 in City Steel Public on October 26, 2024 and sell it today you would lose (4.00) from holding City Steel Public or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangsaphan Barmill Public vs. City Steel Public
Performance |
| Timeline |
| Bangsaphan Barmill Public |
| City Steel Public |
Bangsaphan Barmill and City Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangsaphan Barmill and City Steel
The main advantage of trading using opposite Bangsaphan Barmill and City Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangsaphan Barmill 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.| Bangsaphan Barmill vs. Asia Metal Public | Bangsaphan Barmill vs. Chonburi Concrete Product | Bangsaphan Barmill vs. Asia Plus Group | Bangsaphan Barmill vs. CSP Steel Center |
| City Steel vs. Capital Engineering Network | City Steel vs. Bangsaphan Barmill Public | City Steel vs. CSP Steel Center | City Steel vs. Chukai 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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