Correlation Between SAF Special and SC Asset
Can any of the company-specific risk be diversified away by investing in both SAF Special and SC Asset 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 SC Asset 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 SC Asset, you can compare the effects of market volatilities on SAF Special and SC Asset 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 SC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAF Special and SC Asset.
Diversification Opportunities for SAF Special and SC Asset
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SAF and SC Asset is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SAF Special Steel and SC Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC Asset 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 SC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC Asset has no effect on the direction of SAF Special i.e., SAF Special and SC Asset go up and down completely randomly.
Pair Corralation between SAF Special and SC Asset
Assuming the 90 days trading horizon SAF Special Steel is expected to under-perform the SC Asset. But the stock apears to be less risky and, when comparing its historical volatility, SAF Special Steel is 12.89 times less risky than SC Asset. The stock trades about -0.08 of its potential returns per unit of risk. The SC Asset is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 365.00 in SC Asset on September 3, 2024 and sell it today you would lose (77.00) from holding SC Asset or give up 21.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.62% |
| Values | Daily Returns |
SAF Special Steel vs. SC Asset
Performance |
| Timeline |
| SAF Special Steel |
| SC Asset |
SAF Special and SC Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAF Special and SC Asset
The main advantage of trading using opposite SAF Special and SC Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAF Special position performs unexpectedly, SC Asset 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 SC Asset will offset losses from the drop in SC Asset's long position.| SAF Special vs. Diamond Building Products | SAF Special vs. MCS Steel Public | SAF Special vs. Asia Green Energy | SAF Special vs. Hwa Fong Rubber |
| SC Asset vs. Pato Chemical Industry | SC Asset vs. KTBST Mixed Leasehold | SC Asset vs. Saksiam Leasing Public | SC Asset vs. PINTHONG INDUSTRIAL PARK |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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