Correlation Between CK Power and Steel Public
Can any of the company-specific risk be diversified away by investing in both CK Power and Steel 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 CK Power and Steel Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Power Public and The Steel Public, you can compare the effects of market volatilities on CK Power and Steel 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 CK Power with a short position of Steel Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Steel Public.
Diversification Opportunities for CK Power and Steel Public
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CKP and Steel is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and The Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Public and CK Power 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 CK Power Public are associated (or correlated) with Steel Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Public has no effect on the direction of CK Power i.e., CK Power and Steel Public go up and down completely randomly.
Pair Corralation between CK Power and Steel Public
Assuming the 90 days trading horizon CK Power Public is expected to under-perform the Steel Public. But the stock apears to be less risky and, when comparing its historical volatility, CK Power Public is 24.83 times less risky than Steel Public. The stock trades about -0.03 of its potential returns per unit of risk. The The Steel Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 144.00 in The Steel Public on August 29, 2024 and sell it today you would lose (66.00) from holding The Steel Public or give up 45.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Power Public vs. The Steel Public
Performance |
| Timeline |
| CK Power Public |
| Steel Public |
CK Power and Steel Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Steel Public
The main advantage of trading using opposite CK Power and Steel Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Steel 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 Steel Public will offset losses from the drop in Steel Public's long position.| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
| Steel Public vs. MCS Steel Public | Steel Public vs. Asia Plus Group | Steel Public vs. Lalin Property Public | Steel Public vs. Lam Soon 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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