Correlation Between TMT Steel and Sahamit Machinery
Can any of the company-specific risk be diversified away by investing in both TMT Steel and Sahamit Machinery 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 Sahamit Machinery 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 Sahamit Machinery Public, you can compare the effects of market volatilities on TMT Steel and Sahamit Machinery 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 Sahamit Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMT Steel and Sahamit Machinery.
Diversification Opportunities for TMT Steel and Sahamit Machinery
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TMT and Sahamit is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding TMT Steel Public and Sahamit Machinery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sahamit Machinery 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 Sahamit Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sahamit Machinery Public has no effect on the direction of TMT Steel i.e., TMT Steel and Sahamit Machinery go up and down completely randomly.
Pair Corralation between TMT Steel and Sahamit Machinery
Assuming the 90 days trading horizon TMT Steel is expected to generate 1.06 times less return on investment than Sahamit Machinery. In addition to that, TMT Steel is 1.0 times more volatile than Sahamit Machinery Public. It trades about 0.04 of its total potential returns per unit of risk. Sahamit Machinery Public is currently generating about 0.04 per unit of volatility. If you would invest 445.00 in Sahamit Machinery Public on August 26, 2024 and sell it today you would lose (35.00) from holding Sahamit Machinery Public or give up 7.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TMT Steel Public vs. Sahamit Machinery Public
Performance |
| Timeline |
| TMT Steel Public |
| Sahamit Machinery Public |
TMT Steel and Sahamit Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMT Steel and Sahamit Machinery
The main advantage of trading using opposite TMT Steel and Sahamit Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMT Steel position performs unexpectedly, Sahamit Machinery 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 Sahamit Machinery will offset losses from the drop in Sahamit Machinery's long position.| TMT Steel vs. PTT Public | TMT Steel vs. PTT Exploration and | TMT Steel vs. CP ALL Public | TMT Steel vs. Kasikornbank Public |
| Sahamit Machinery vs. Tata Steel Public | Sahamit Machinery vs. Thaifoods Group Public | Sahamit Machinery vs. TMT Steel Public | Sahamit Machinery vs. The Erawan Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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