Correlation Between CSP Steel and STPI Public
Can any of the company-specific risk be diversified away by investing in both CSP Steel and STPI 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 CSP Steel and STPI Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSP Steel Center and STPI Public, you can compare the effects of market volatilities on CSP Steel and STPI 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 CSP Steel with a short position of STPI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP Steel and STPI Public.
Diversification Opportunities for CSP Steel and STPI Public
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSP and STPI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CSP Steel Center and STPI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STPI Public and CSP 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 CSP Steel Center are associated (or correlated) with STPI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STPI Public has no effect on the direction of CSP Steel i.e., CSP Steel and STPI Public go up and down completely randomly.
Pair Corralation between CSP Steel and STPI Public
Assuming the 90 days trading horizon CSP Steel Center is expected to under-perform the STPI Public. In addition to that, CSP Steel is 2.42 times more volatile than STPI Public. It trades about -0.16 of its total potential returns per unit of risk. STPI Public is currently generating about -0.29 per unit of volatility. If you would invest 318.00 in STPI Public on November 4, 2024 and sell it today you would lose (22.00) from holding STPI Public or give up 6.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSP Steel Center vs. STPI Public
Performance |
| Timeline |
| CSP Steel Center |
| STPI Public |
CSP Steel and STPI Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSP Steel and STPI Public
The main advantage of trading using opposite CSP Steel and STPI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSP Steel position performs unexpectedly, STPI 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 STPI Public will offset losses from the drop in STPI Public's long position.| CSP Steel vs. Asia Metal Public | CSP Steel vs. 2S Metal Public | CSP Steel vs. Bangsaphan Barmill Public | CSP Steel vs. Agripure Holdings Public |
| STPI Public vs. CH Karnchang Public | STPI Public vs. Siri Prime Office | STPI Public vs. AP Public | STPI Public vs. SVI 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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