Correlation Between SAF Special and Permsin Steel
Can any of the company-specific risk be diversified away by investing in both SAF Special and Permsin 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 SAF Special and Permsin Steel 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 Permsin Steel Works, you can compare the effects of market volatilities on SAF Special and Permsin 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 SAF Special with a short position of Permsin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAF Special and Permsin Steel.
Diversification Opportunities for SAF Special and Permsin Steel
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAF and Permsin is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SAF Special Steel and Permsin Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permsin Steel Works 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 Permsin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permsin Steel Works has no effect on the direction of SAF Special i.e., SAF Special and Permsin Steel go up and down completely randomly.
Pair Corralation between SAF Special and Permsin Steel
Assuming the 90 days trading horizon SAF Special Steel is expected to under-perform the Permsin Steel. But the stock apears to be less risky and, when comparing its historical volatility, SAF Special Steel is 12.92 times less risky than Permsin Steel. The stock trades about -0.08 of its potential returns per unit of risk. The Permsin Steel Works is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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 |
SAF Special Steel vs. Permsin Steel Works
Performance |
| Timeline |
| SAF Special Steel |
| Permsin Steel Works |
SAF Special and Permsin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAF Special and Permsin Steel
The main advantage of trading using opposite SAF Special and Permsin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAF Special position performs unexpectedly, Permsin 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 Permsin Steel will offset losses from the drop in Permsin Steel'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 |
| Permsin Steel vs. Pacific Pipe Public | Permsin Steel vs. MCS Steel Public | Permsin Steel vs. Millcon Steel Public | Permsin Steel vs. POSCO Thainox 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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