Correlation Between CIMB Thai and Thai Steel
Can any of the company-specific risk be diversified away by investing in both CIMB Thai and Thai 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 CIMB Thai and Thai Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIMB Thai Bank and Thai Steel Cable, you can compare the effects of market volatilities on CIMB Thai and Thai 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 CIMB Thai with a short position of Thai Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and Thai Steel.
Diversification Opportunities for CIMB Thai and Thai Steel
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CIMB and Thai is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and Thai Steel Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Steel Cable and CIMB Thai 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 CIMB Thai Bank are associated (or correlated) with Thai Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Steel Cable has no effect on the direction of CIMB Thai i.e., CIMB Thai and Thai Steel go up and down completely randomly.
Pair Corralation between CIMB Thai and Thai Steel
Assuming the 90 days trading horizon CIMB Thai is expected to generate 1.07 times less return on investment than Thai Steel. In addition to that, CIMB Thai is 1.0 times more volatile than Thai Steel Cable. It trades about 0.05 of its total potential returns per unit of risk. Thai Steel Cable is currently generating about 0.05 per unit of volatility. If you would invest 1,258 in Thai Steel Cable on September 12, 2024 and sell it today you would earn a total of 242.00 from holding Thai Steel Cable or generate 19.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIMB Thai Bank vs. Thai Steel Cable
Performance |
| Timeline |
| CIMB Thai Bank |
| Thai Steel Cable |
CIMB Thai and Thai Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIMB Thai and Thai Steel
The main advantage of trading using opposite CIMB Thai and Thai Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMB Thai position performs unexpectedly, Thai 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 Thai Steel will offset losses from the drop in Thai Steel's long position.| CIMB Thai vs. KGI Securities Public | CIMB Thai vs. Lalin Property Public | CIMB Thai vs. Hwa Fong Rubber | CIMB Thai vs. MCS Steel Public |
| Thai Steel vs. Hwa Fong Rubber | Thai Steel vs. AAPICO Hitech Public | Thai Steel vs. Haad Thip Public | Thai Steel vs. Italian Thai Development 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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