Correlation Between City Steel and Thai Oil
Can any of the company-specific risk be diversified away by investing in both City Steel and Thai Oil 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 Thai Oil 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 Thai Oil Public, you can compare the effects of market volatilities on City Steel and Thai Oil 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 Thai Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Steel and Thai Oil.
Diversification Opportunities for City Steel and Thai Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between City and Thai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding City Steel Public and Thai Oil Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Oil 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 Thai Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Oil Public has no effect on the direction of City Steel i.e., City Steel and Thai Oil go up and down completely randomly.
Pair Corralation between City Steel and Thai Oil
Assuming the 90 days trading horizon City Steel Public is expected to generate 0.54 times more return on investment than Thai Oil. However, City Steel Public is 1.86 times less risky than Thai Oil. It trades about -0.16 of its potential returns per unit of risk. Thai Oil Public is currently generating about -0.15 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Steel Public vs. Thai Oil Public
Performance |
| Timeline |
| City Steel Public |
| Thai Oil Public |
City Steel and Thai Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Steel and Thai Oil
The main advantage of trading using opposite City Steel and Thai Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Steel position performs unexpectedly, Thai Oil 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 Oil will offset losses from the drop in Thai Oil'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 |
| Thai Oil vs. Sawang Export Public | Thai Oil vs. Quality Houses Hotel | Thai Oil vs. Grande Hospitality Real | Thai Oil vs. City Steel 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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