Correlation Between MCS Steel and Bangkok Bank
Can any of the company-specific risk be diversified away by investing in both MCS Steel and Bangkok Bank 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 MCS Steel and Bangkok Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCS Steel Public and Bangkok Bank Public, you can compare the effects of market volatilities on MCS Steel and Bangkok Bank 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 MCS Steel with a short position of Bangkok Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Bangkok Bank.
Diversification Opportunities for MCS Steel and Bangkok Bank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MCS and Bangkok is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and Bangkok Bank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Bank Public and MCS 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 MCS Steel Public are associated (or correlated) with Bangkok Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Bank Public has no effect on the direction of MCS Steel i.e., MCS Steel and Bangkok Bank go up and down completely randomly.
Pair Corralation between MCS Steel and Bangkok Bank
Assuming the 90 days trading horizon MCS Steel Public is expected to generate 70.52 times more return on investment than Bangkok Bank. However, MCS Steel is 70.52 times more volatile than Bangkok Bank Public. It trades about 0.08 of its potential returns per unit of risk. Bangkok Bank Public is currently generating about 0.09 per unit of risk. If you would invest 662.00 in MCS Steel Public on September 19, 2024 and sell it today you would earn a total of 28.00 from holding MCS Steel Public or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCS Steel Public vs. Bangkok Bank Public
Performance |
| Timeline |
| MCS Steel Public |
| Bangkok Bank Public |
MCS Steel and Bangkok Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and Bangkok Bank
The main advantage of trading using opposite MCS Steel and Bangkok Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel position performs unexpectedly, Bangkok Bank 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 Bangkok Bank will offset losses from the drop in Bangkok Bank's long position.| MCS Steel vs. Lalin Property Public | MCS Steel vs. Land and Houses | MCS Steel vs. Banpu Public | MCS Steel vs. TISCO Financial Group |
| Bangkok Bank vs. Lalin Property Public | Bangkok Bank vs. Hwa Fong Rubber | Bangkok Bank vs. MCS 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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