Correlation Between City Steel and Salee Printing
Can any of the company-specific risk be diversified away by investing in both City Steel and Salee Printing 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 Salee Printing 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 Salee Printing Public, you can compare the effects of market volatilities on City Steel and Salee Printing 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 Salee Printing. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Steel and Salee Printing.
Diversification Opportunities for City Steel and Salee Printing
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Salee is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding City Steel Public and Salee Printing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salee Printing 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 Salee Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salee Printing Public has no effect on the direction of City Steel i.e., City Steel and Salee Printing go up and down completely randomly.
Pair Corralation between City Steel and Salee Printing
Assuming the 90 days trading horizon City Steel Public is expected to under-perform the Salee Printing. But the stock apears to be less risky and, when comparing its historical volatility, City Steel Public is 3.37 times less risky than Salee Printing. The stock trades about -0.16 of its potential returns per unit of risk. The Salee Printing Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 51.00 in Salee Printing Public on September 1, 2024 and sell it today you would lose (2.00) from holding Salee Printing Public or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
City Steel Public vs. Salee Printing Public
Performance |
| Timeline |
| City Steel Public |
| Salee Printing Public |
City Steel and Salee Printing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Steel and Salee Printing
The main advantage of trading using opposite City Steel and Salee Printing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Steel position performs unexpectedly, Salee Printing 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 Salee Printing will offset losses from the drop in Salee Printing'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 |
| Salee Printing vs. S Pack Print | Salee Printing vs. Sahamitr Pressure Container | Salee Printing vs. Srithai Superware Public | Salee Printing vs. Sahamit Machinery 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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