Correlation Between MCS Steel and Muang Thai
Can any of the company-specific risk be diversified away by investing in both MCS Steel and Muang Thai 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 Muang Thai 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 Muang Thai Insurance, you can compare the effects of market volatilities on MCS Steel and Muang Thai 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 Muang Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Muang Thai.
Diversification Opportunities for MCS Steel and Muang Thai
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MCS and Muang is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and Muang Thai Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muang Thai Insurance 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 Muang Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muang Thai Insurance has no effect on the direction of MCS Steel i.e., MCS Steel and Muang Thai go up and down completely randomly.
Pair Corralation between MCS Steel and Muang Thai
Assuming the 90 days trading horizon MCS Steel Public is expected to generate 1.42 times more return on investment than Muang Thai. However, MCS Steel is 1.42 times more volatile than Muang Thai Insurance. It trades about -0.1 of its potential returns per unit of risk. Muang Thai Insurance is currently generating about -0.15 per unit of risk. If you would invest 740.00 in MCS Steel Public on September 13, 2024 and sell it today you would lose (40.00) from holding MCS Steel Public or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCS Steel Public vs. Muang Thai Insurance
Performance |
| Timeline |
| MCS Steel Public |
| Muang Thai Insurance |
MCS Steel and Muang Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and Muang Thai
The main advantage of trading using opposite MCS Steel and Muang Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel position performs unexpectedly, Muang Thai 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 Muang Thai will offset losses from the drop in Muang Thai'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 |
| Muang Thai vs. Bangkok Life Assurance | Muang Thai vs. Karmarts Public | Muang Thai vs. Kang Yong Electric | Muang Thai vs. Kiatnakin Phatra Bank |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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