Correlation Between City Steel and Patkol Public
Can any of the company-specific risk be diversified away by investing in both City Steel and Patkol Public 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 City Steel and Patkol Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Steel Public and Patkol Public, you can compare the effects of market volatilities on City Steel and Patkol Public 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 City Steel with a short position of Patkol Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Steel and Patkol Public.
Diversification Opportunities for City Steel and Patkol Public
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between City and Patkol is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding City Steel Public and Patkol Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patkol Public and City 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 City Steel Public are associated (or correlated) with Patkol Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patkol Public has no effect on the direction of City Steel i.e., City Steel and Patkol Public go up and down completely randomly.
Pair Corralation between City Steel and Patkol Public
Assuming the 90 days trading horizon City Steel Public is expected to generate 0.41 times more return on investment than Patkol Public. However, City Steel Public is 2.43 times less risky than Patkol Public. It trades about -0.16 of its potential returns per unit of risk. Patkol Public is currently generating about -0.37 per unit of risk. If you would invest 194.00 in City Steel Public on September 1, 2024 and sell it today you would lose (8.00) from holding City Steel Public or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
City Steel Public vs. Patkol Public
Performance |
| Timeline |
| City Steel Public |
| Patkol Public |
City Steel and Patkol Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Steel and Patkol Public
The main advantage of trading using opposite City Steel and Patkol Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Steel position performs unexpectedly, Patkol Public 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 Patkol Public will offset losses from the drop in Patkol Public's long position.| City Steel vs. AAPICO Hitech Public | City Steel vs. AP Public | City Steel vs. Aikchol Hospital Public | City Steel vs. Bank of Ayudhya |
| Patkol Public vs. Permsin Steel Works | Patkol Public vs. Kulthorn Kirby Public | Patkol Public vs. Power Line Engineering | Patkol Public vs. Peoples Garment 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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