Correlation Between POSCO Thainox and RB Food
Can any of the company-specific risk be diversified away by investing in both POSCO Thainox and RB Food 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 POSCO Thainox and RB Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Thainox Public and RB Food Supply, you can compare the effects of market volatilities on POSCO Thainox and RB Food 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 POSCO Thainox with a short position of RB Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Thainox and RB Food.
Diversification Opportunities for POSCO Thainox and RB Food
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POSCO and RBF is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Thainox Public and RB Food Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB Food Supply and POSCO Thainox 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 POSCO Thainox Public are associated (or correlated) with RB Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB Food Supply has no effect on the direction of POSCO Thainox i.e., POSCO Thainox and RB Food go up and down completely randomly.
Pair Corralation between POSCO Thainox and RB Food
Assuming the 90 days trading horizon POSCO Thainox Public is expected to generate 1.16 times more return on investment than RB Food. However, POSCO Thainox is 1.16 times more volatile than RB Food Supply. It trades about -0.11 of its potential returns per unit of risk. RB Food Supply is currently generating about -0.37 per unit of risk. If you would invest 47.00 in POSCO Thainox Public on November 28, 2024 and sell it today you would lose (3.00) from holding POSCO Thainox Public or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Thainox Public vs. RB Food Supply
Performance |
| Timeline |
| POSCO Thainox Public |
| RB Food Supply |
POSCO Thainox and RB Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Thainox and RB Food
The main advantage of trading using opposite POSCO Thainox and RB Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Thainox position performs unexpectedly, RB Food 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 RB Food will offset losses from the drop in RB Food's long position.| POSCO Thainox vs. Internet Thailand Public | POSCO Thainox vs. Millcon Steel Public | POSCO Thainox vs. G J Steel | POSCO Thainox vs. Italian Thai Development Public |
| RB Food vs. Osotspa Public | RB Food vs. Thai Union Group | RB Food vs. Carabao Group Public | RB Food vs. PTG Energy PCL |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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