Correlation Between Chow Steel and Thai OPP
Can any of the company-specific risk be diversified away by investing in both Chow Steel and Thai OPP 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 Chow Steel and Thai OPP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chow Steel Industries and Thai OPP Public, you can compare the effects of market volatilities on Chow Steel and Thai OPP 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 Chow Steel with a short position of Thai OPP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chow Steel and Thai OPP.
Diversification Opportunities for Chow Steel and Thai OPP
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chow and Thai is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Chow Steel Industries and Thai OPP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai OPP Public and Chow Steel 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 Chow Steel Industries are associated (or correlated) with Thai OPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai OPP Public has no effect on the direction of Chow Steel i.e., Chow Steel and Thai OPP go up and down completely randomly.
Pair Corralation between Chow Steel and Thai OPP
Assuming the 90 days trading horizon Chow Steel Industries is expected to generate 1.0 times more return on investment than Thai OPP. However, Chow Steel Industries is 1.0 times less risky than Thai OPP. It trades about 0.06 of its potential returns per unit of risk. Thai OPP Public is currently generating about 0.06 per unit of risk. If you would invest 139.00 in Chow Steel Industries on September 12, 2024 and sell it today you would earn a total of 61.00 from holding Chow Steel Industries or generate 43.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Chow Steel Industries vs. Thai OPP Public
Performance |
| Timeline |
| Chow Steel Industries |
| Thai OPP Public |
Chow Steel and Thai OPP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chow Steel and Thai OPP
The main advantage of trading using opposite Chow Steel and Thai OPP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chow Steel position performs unexpectedly, Thai OPP 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 Thai OPP will offset losses from the drop in Thai OPP's long position.| Chow Steel vs. Tata Steel Public | Chow Steel vs. G J Steel | Chow Steel vs. POSCO Thainox Public | Chow Steel vs. TMT Steel Public |
| Thai OPP vs. SAF Special Steel | Thai OPP vs. Kasikornbank Public | Thai OPP vs. Chow Steel Industries | Thai OPP vs. General Environmental Conservation |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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