Correlation Between Thantawan Industry and MCS Steel
Can any of the company-specific risk be diversified away by investing in both Thantawan Industry and MCS 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 Thantawan Industry and MCS Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thantawan Industry Public and MCS Steel Public, you can compare the effects of market volatilities on Thantawan Industry and MCS 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 Thantawan Industry with a short position of MCS Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thantawan Industry and MCS Steel.
Diversification Opportunities for Thantawan Industry and MCS Steel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thantawan and MCS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and MCS Steel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCS Steel Public and Thantawan Industry 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 Thantawan Industry Public are associated (or correlated) with MCS Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCS Steel Public has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and MCS Steel go up and down completely randomly.
Pair Corralation between Thantawan Industry and MCS Steel
Assuming the 90 days trading horizon Thantawan Industry is expected to generate 54.84 times less return on investment than MCS Steel. But when comparing it to its historical volatility, Thantawan Industry Public is 44.93 times less risky than MCS Steel. It trades about 0.04 of its potential returns per unit of risk. MCS Steel Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 570.00 in MCS Steel Public on September 12, 2024 and sell it today you would earn a total of 130.00 from holding MCS Steel Public or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thantawan Industry Public vs. MCS Steel Public
Performance |
| Timeline |
| Thantawan Industry Public |
| MCS Steel Public |
Thantawan Industry and MCS Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thantawan Industry and MCS Steel
The main advantage of trading using opposite Thantawan Industry and MCS Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thantawan Industry position performs unexpectedly, MCS 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 MCS Steel will offset losses from the drop in MCS Steel's long position.| Thantawan Industry vs. The Erawan Group | Thantawan Industry vs. Jay Mart Public | Thantawan Industry vs. Airports of Thailand | Thantawan Industry vs. Eastern Technical Engineering |
| MCS Steel vs. Thantawan Industry Public | MCS Steel vs. The Erawan Group | MCS Steel vs. Jay Mart Public | MCS Steel vs. Airports of Thailand |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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