Correlation Between Steel Public and Airports
Can any of the company-specific risk be diversified away by investing in both Steel Public and Airports 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 Public and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Steel Public and Airports of Thailand, you can compare the effects of market volatilities on Steel Public and Airports 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 Public with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Public and Airports.
Diversification Opportunities for Steel Public and Airports
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Steel and Airports is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding The Steel Public and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and Steel Public 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 The Steel Public are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Steel Public i.e., Steel Public and Airports go up and down completely randomly.
Pair Corralation between Steel Public and Airports
Assuming the 90 days trading horizon The Steel Public is expected to generate 119.41 times more return on investment than Airports. However, Steel Public is 119.41 times more volatile than Airports of Thailand. It trades about 0.11 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.04 per unit of risk. If you would invest 100.00 in The Steel Public on August 28, 2024 and sell it today you would lose (28.00) from holding The Steel Public or give up 28.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Steel Public vs. Airports of Thailand
Performance |
| Timeline |
| Steel Public |
| Airports of Thailand |
Steel Public and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Public and Airports
The main advantage of trading using opposite Steel Public and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Public position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Steel Public vs. TMT Steel Public | Steel Public vs. Tycoons Worldwide Group | Steel Public vs. Thai German Products Public | Steel Public vs. Siam Steel Service |
| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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