Correlation Between Steel Public and Interlink Communication
Can any of the company-specific risk be diversified away by investing in both Steel Public and Interlink Communication 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 Interlink Communication 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 Interlink Communication Public, you can compare the effects of market volatilities on Steel Public and Interlink Communication 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 Interlink Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Public and Interlink Communication.
Diversification Opportunities for Steel Public and Interlink Communication
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Steel and Interlink is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding The Steel Public and Interlink Communication Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Communication 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 Interlink Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Communication has no effect on the direction of Steel Public i.e., Steel Public and Interlink Communication go up and down completely randomly.
Pair Corralation between Steel Public and Interlink Communication
Assuming the 90 days trading horizon The Steel Public is expected to generate 1.64 times more return on investment than Interlink Communication. However, Steel Public is 1.64 times more volatile than Interlink Communication Public. It trades about -0.07 of its potential returns per unit of risk. Interlink Communication Public is currently generating about -0.16 per unit of risk. If you would invest 83.00 in The Steel Public on August 30, 2024 and sell it today you would lose (5.00) from holding The Steel Public or give up 6.02% 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. Interlink Communication Public
Performance |
| Timeline |
| Steel Public |
| Interlink Communication |
Steel Public and Interlink Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Public and Interlink Communication
The main advantage of trading using opposite Steel Public and Interlink Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Public position performs unexpectedly, Interlink Communication 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 Interlink Communication will offset losses from the drop in Interlink Communication's long position.| Steel Public vs. MCS Steel Public | Steel Public vs. Asia Plus Group | Steel Public vs. Lalin Property Public | Steel Public vs. Lam Soon Public |
| Interlink Communication vs. AP Public | Interlink Communication vs. Jasmine International Public | Interlink Communication vs. Asia Plus Group | Interlink Communication vs. Bangchak 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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