Correlation Between SAF Special and G J
Can any of the company-specific risk be diversified away by investing in both SAF Special and G J 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 SAF Special and G J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAF Special Steel and G J Steel, you can compare the effects of market volatilities on SAF Special and G J 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 SAF Special with a short position of G J. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAF Special and G J.
Diversification Opportunities for SAF Special and G J
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAF and GJS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SAF Special Steel and G J Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G J Steel and SAF Special 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 SAF Special Steel are associated (or correlated) with G J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G J Steel has no effect on the direction of SAF Special i.e., SAF Special and G J go up and down completely randomly.
Pair Corralation between SAF Special and G J
Assuming the 90 days trading horizon SAF Special Steel is expected to under-perform the G J. But the stock apears to be less risky and, when comparing its historical volatility, SAF Special Steel is 12.95 times less risky than G J. The stock trades about -0.08 of its potential returns per unit of risk. The G J Steel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 34.00 in G J Steel on September 14, 2024 and sell it today you would lose (18.00) from holding G J Steel or give up 52.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.46% |
| Values | Daily Returns |
SAF Special Steel vs. G J Steel
Performance |
| Timeline |
| SAF Special Steel |
| G J Steel |
SAF Special and G J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAF Special and G J
The main advantage of trading using opposite SAF Special and G J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAF Special position performs unexpectedly, G J 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 G J will offset losses from the drop in G J's long position.| SAF Special vs. Ratchthani Leasing Public | SAF Special vs. LH Hotel Leasehold | SAF Special vs. BA Airport Leasehold | SAF Special vs. KTBST Mixed Leasehold |
| G J vs. POSCO Thainox Public | G J vs. Aqua Public | G J vs. Better World Green | G J vs. Eternal Energy 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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