Correlation Between Rockworth Public and Siam Steel
Can any of the company-specific risk be diversified away by investing in both Rockworth Public and Siam Steel 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 Rockworth Public and Siam Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockworth Public and Siam Steel International, you can compare the effects of market volatilities on Rockworth Public and Siam Steel 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 Rockworth Public with a short position of Siam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockworth Public and Siam Steel.
Diversification Opportunities for Rockworth Public and Siam Steel
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rockworth and Siam is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Rockworth Public and Siam Steel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel International and Rockworth Public 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 Rockworth Public are associated (or correlated) with Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel International has no effect on the direction of Rockworth Public i.e., Rockworth Public and Siam Steel go up and down completely randomly.
Pair Corralation between Rockworth Public and Siam Steel
Assuming the 90 days trading horizon Rockworth Public is expected to generate 1.0 times more return on investment than Siam Steel. However, Rockworth Public is 1.0 times more volatile than Siam Steel International. It trades about 0.04 of its potential returns per unit of risk. Siam Steel International is currently generating about 0.04 per unit of risk. If you would invest 790.00 in Rockworth Public on September 4, 2024 and sell it today you would earn a total of 310.00 from holding Rockworth Public or generate 39.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Rockworth Public vs. Siam Steel International
Performance |
| Timeline |
| Rockworth Public |
| Siam Steel International |
Rockworth Public and Siam Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockworth Public and Siam Steel
The main advantage of trading using opposite Rockworth Public and Siam Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockworth Public position performs unexpectedly, Siam Steel 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 Siam Steel will offset losses from the drop in Siam Steel's long position.| Rockworth Public vs. Ocean Glass Public | Rockworth Public vs. Siam Steel International | Rockworth Public vs. Peoples Garment Public | Rockworth Public vs. RPCG 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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