Correlation Between TMT Steel and Rockworth Public
Can any of the company-specific risk be diversified away by investing in both TMT Steel and Rockworth Public 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 TMT Steel and Rockworth Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TMT Steel Public and Rockworth Public, you can compare the effects of market volatilities on TMT Steel and Rockworth Public 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 TMT Steel with a short position of Rockworth Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMT Steel and Rockworth Public.
Diversification Opportunities for TMT Steel and Rockworth Public
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between TMT and Rockworth is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding TMT Steel Public and Rockworth Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockworth Public and TMT Steel 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 TMT Steel Public are associated (or correlated) with Rockworth Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockworth Public has no effect on the direction of TMT Steel i.e., TMT Steel and Rockworth Public go up and down completely randomly.
Pair Corralation between TMT Steel and Rockworth Public
Assuming the 90 days trading horizon TMT Steel Public is expected to under-perform the Rockworth Public. But the stock apears to be less risky and, when comparing its historical volatility, TMT Steel Public is 4.61 times less risky than Rockworth Public. The stock trades about -0.68 of its potential returns per unit of risk. The Rockworth Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 980.00 in Rockworth Public on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Rockworth Public or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMT Steel Public vs. Rockworth Public
Performance |
| Timeline |
| TMT Steel Public |
| Rockworth Public |
TMT Steel and Rockworth Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMT Steel and Rockworth Public
The main advantage of trading using opposite TMT Steel and Rockworth Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMT Steel position performs unexpectedly, Rockworth Public 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 Rockworth Public will offset losses from the drop in Rockworth Public's long position.| TMT Steel vs. Thantawan Industry Public | TMT Steel vs. The Erawan Group | TMT Steel vs. Jay Mart Public | TMT Steel vs. Airports of Thailand |
| Rockworth Public vs. Tata Steel Public | Rockworth Public vs. TTCL Public | Rockworth Public vs. Thaifoods Group Public | Rockworth Public vs. TMT Steel 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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