Correlation Between Reliance Steel and PTT OIL+RETBUS-FOR-B
Can any of the company-specific risk be diversified away by investing in both Reliance Steel and PTT OIL+RETBUS-FOR-B 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 Reliance Steel and PTT OIL+RETBUS-FOR-B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reliance Steel Aluminum and PTT OILRETBUS FOR BA10, you can compare the effects of market volatilities on Reliance Steel and PTT OIL+RETBUS-FOR-B 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 Reliance Steel with a short position of PTT OIL+RETBUS-FOR-B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Steel and PTT OIL+RETBUS-FOR-B.
Diversification Opportunities for Reliance Steel and PTT OIL+RETBUS-FOR-B
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Reliance and PTT is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Steel Aluminum and PTT OILRETBUS FOR BA10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT OIL+RETBUS-FOR-B and Reliance 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 Reliance Steel Aluminum are associated (or correlated) with PTT OIL+RETBUS-FOR-B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT OIL+RETBUS-FOR-B has no effect on the direction of Reliance Steel i.e., Reliance Steel and PTT OIL+RETBUS-FOR-B go up and down completely randomly.
Pair Corralation between Reliance Steel and PTT OIL+RETBUS-FOR-B
Assuming the 90 days horizon Reliance Steel Aluminum is expected to generate 0.73 times more return on investment than PTT OIL+RETBUS-FOR-B. However, Reliance Steel Aluminum is 1.37 times less risky than PTT OIL+RETBUS-FOR-B. It trades about -0.44 of its potential returns per unit of risk. PTT OILRETBUS FOR BA10 is currently generating about -0.33 per unit of risk. If you would invest 29,570 in Reliance Steel Aluminum on September 22, 2024 and sell it today you would lose (3,820) from holding Reliance Steel Aluminum or give up 12.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliance Steel Aluminum vs. PTT OILRETBUS FOR BA10
Performance |
| Timeline |
| Reliance Steel Aluminum |
| PTT OIL+RETBUS-FOR-B |
Reliance Steel and PTT OIL+RETBUS-FOR-B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliance Steel and PTT OIL+RETBUS-FOR-B
The main advantage of trading using opposite Reliance Steel and PTT OIL+RETBUS-FOR-B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Steel position performs unexpectedly, PTT OIL+RETBUS-FOR-B 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 PTT OIL+RETBUS-FOR-B will offset losses from the drop in PTT OIL+RETBUS-FOR-B's long position.| Reliance Steel vs. Liberty Broadband | Reliance Steel vs. Transportadora de Gas | Reliance Steel vs. TRAINLINE PLC LS | Reliance Steel vs. TITANIUM TRANSPORTGROUP |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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