Correlation Between MCS Steel and Thai Stanley
Can any of the company-specific risk be diversified away by investing in both MCS Steel and Thai Stanley 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 Thai Stanley 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 Thai Stanley Electric, you can compare the effects of market volatilities on MCS Steel and Thai Stanley 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 Thai Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Thai Stanley.
Diversification Opportunities for MCS Steel and Thai Stanley
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MCS and Thai is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and Thai Stanley Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Stanley Electric 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 Thai Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Stanley Electric has no effect on the direction of MCS Steel i.e., MCS Steel and Thai Stanley go up and down completely randomly.
Pair Corralation between MCS Steel and Thai Stanley
Assuming the 90 days trading horizon MCS Steel Public is expected to under-perform the Thai Stanley. In addition to that, MCS Steel is 2.92 times more volatile than Thai Stanley Electric. It trades about -0.12 of its total potential returns per unit of risk. Thai Stanley Electric is currently generating about 0.0 per unit of volatility. If you would invest 21,800 in Thai Stanley Electric on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Thai Stanley Electric or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MCS Steel Public vs. Thai Stanley Electric
Performance |
| Timeline |
| MCS Steel Public |
| Thai Stanley Electric |
MCS Steel and Thai Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and Thai Stanley
The main advantage of trading using opposite MCS Steel and Thai Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel position performs unexpectedly, Thai Stanley 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 Thai Stanley will offset losses from the drop in Thai Stanley's long position.| MCS Steel vs. AAPICO Hitech Public | MCS Steel vs. AP Public | MCS Steel vs. Aikchol Hospital Public | MCS Steel vs. Bank of Ayudhya |
| Thai Stanley vs. TRC Construction Public | Thai Stanley vs. Bangkok Expressway and | Thai Stanley vs. Lohakit Metal Public | Thai Stanley vs. Gunkul Engineering 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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