Correlation Between MCS Steel and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both MCS Steel and Thoresen 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 Thoresen 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 Thoresen Thai Agencies, you can compare the effects of market volatilities on MCS Steel and Thoresen 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 Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCS Steel and Thoresen Thai.
Diversification Opportunities for MCS Steel and Thoresen Thai
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between MCS and Thoresen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MCS Steel Public and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies 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 Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of MCS Steel i.e., MCS Steel and Thoresen Thai go up and down completely randomly.
Pair Corralation between MCS Steel and Thoresen Thai
Assuming the 90 days trading horizon MCS Steel Public is expected to under-perform the Thoresen Thai. But the stock apears to be less risky and, when comparing its historical volatility, MCS Steel Public is 1.9 times less risky than Thoresen Thai. The stock trades about -0.12 of its potential returns per unit of risk. The Thoresen Thai Agencies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 550.00 in Thoresen Thai Agencies on September 1, 2024 and sell it today you would earn a total of 40.00 from holding Thoresen Thai Agencies or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCS Steel Public vs. Thoresen Thai Agencies
Performance |
| Timeline |
| MCS Steel Public |
| Thoresen Thai Agencies |
MCS Steel and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCS Steel and Thoresen Thai
The main advantage of trading using opposite MCS Steel and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCS Steel position performs unexpectedly, Thoresen 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 Thoresen Thai will offset losses from the drop in Thoresen Thai'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 |
| Thoresen Thai vs. Precious Shipping Public | Thoresen Thai vs. Regional Container Lines | Thoresen Thai vs. PTT Public | Thoresen Thai vs. The Siam Cement |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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