Correlation Between Steel Dynamics and Thai Nakarin
Can any of the company-specific risk be diversified away by investing in both Steel Dynamics and Thai Nakarin 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 Steel Dynamics and Thai Nakarin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Dynamics and Thai Nakarin Hospital, you can compare the effects of market volatilities on Steel Dynamics and Thai Nakarin 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 Steel Dynamics with a short position of Thai Nakarin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Dynamics and Thai Nakarin.
Diversification Opportunities for Steel Dynamics and Thai Nakarin
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and Thai is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Steel Dynamics and Thai Nakarin Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Nakarin Hospital and Steel Dynamics 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 Steel Dynamics are associated (or correlated) with Thai Nakarin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Nakarin Hospital has no effect on the direction of Steel Dynamics i.e., Steel Dynamics and Thai Nakarin go up and down completely randomly.
Pair Corralation between Steel Dynamics and Thai Nakarin
Given the investment horizon of 90 days Steel Dynamics is expected to generate 4.56 times more return on investment than Thai Nakarin. However, Steel Dynamics is 4.56 times more volatile than Thai Nakarin Hospital. It trades about 0.09 of its potential returns per unit of risk. Thai Nakarin Hospital is currently generating about 0.26 per unit of risk. If you would invest 13,358 in Steel Dynamics on September 5, 2024 and sell it today you would earn a total of 780.00 from holding Steel Dynamics or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Steel Dynamics vs. Thai Nakarin Hospital
Performance |
| Timeline |
| Steel Dynamics |
| Thai Nakarin Hospital |
Steel Dynamics and Thai Nakarin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Dynamics and Thai Nakarin
The main advantage of trading using opposite Steel Dynamics and Thai Nakarin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Dynamics position performs unexpectedly, Thai Nakarin 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 Thai Nakarin will offset losses from the drop in Thai Nakarin's long position.| Steel Dynamics vs. Cleveland Cliffs | Steel Dynamics vs. United States Steel | Steel Dynamics vs. ArcelorMittal SA ADR | Steel Dynamics vs. Reliance Steel Aluminum |
| Thai Nakarin vs. Vibhavadi Medical Center | Thai Nakarin vs. Ladprao General Hospital | Thai Nakarin vs. Ekachai Medical Care | Thai Nakarin vs. Chularat Hospital 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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