Correlation Between Permsin Steel and SAF Special
Can any of the company-specific risk be diversified away by investing in both Permsin Steel and SAF Special 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 Permsin Steel and SAF Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Permsin Steel Works and SAF Special Steel, you can compare the effects of market volatilities on Permsin Steel and SAF Special 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 Permsin Steel with a short position of SAF Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Permsin Steel and SAF Special.
Diversification Opportunities for Permsin Steel and SAF Special
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Permsin and SAF is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Permsin Steel Works and SAF Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Special Steel and Permsin 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 Permsin Steel Works are associated (or correlated) with SAF Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Special Steel has no effect on the direction of Permsin Steel i.e., Permsin Steel and SAF Special go up and down completely randomly.
Pair Corralation between Permsin Steel and SAF Special
Assuming the 90 days trading horizon Permsin Steel Works is expected to generate 12.92 times more return on investment than SAF Special. However, Permsin Steel is 12.92 times more volatile than SAF Special Steel. It trades about 0.04 of its potential returns per unit of risk. SAF Special Steel is currently generating about -0.08 per unit of risk. If you would invest 114.00 in Permsin Steel Works on September 14, 2024 and sell it today you would lose (52.00) from holding Permsin Steel Works or give up 45.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.46% |
| Values | Daily Returns |
Permsin Steel Works vs. SAF Special Steel
Performance |
| Timeline |
| Permsin Steel Works |
| SAF Special Steel |
Permsin Steel and SAF Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Permsin Steel and SAF Special
The main advantage of trading using opposite Permsin Steel and SAF Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Permsin Steel position performs unexpectedly, SAF Special 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 SAF Special will offset losses from the drop in SAF Special's long position.| Permsin Steel vs. Pacific Pipe Public | Permsin Steel vs. MCS Steel Public | Permsin Steel vs. Millcon Steel Public | Permsin Steel vs. POSCO Thainox Public |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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