Correlation Between TMT Steel and Saha Union
Can any of the company-specific risk be diversified away by investing in both TMT Steel and Saha Union 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 Saha Union 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 Saha Union Public, you can compare the effects of market volatilities on TMT Steel and Saha Union 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 Saha Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMT Steel and Saha Union.
Diversification Opportunities for TMT Steel and Saha Union
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TMT and Saha is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding TMT Steel Public and Saha Union Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saha Union 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 Saha Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saha Union Public has no effect on the direction of TMT Steel i.e., TMT Steel and Saha Union go up and down completely randomly.
Pair Corralation between TMT Steel and Saha Union
Assuming the 90 days trading horizon TMT Steel Public is expected to generate 1.82 times more return on investment than Saha Union. However, TMT Steel is 1.82 times more volatile than Saha Union Public. It trades about -0.02 of its potential returns per unit of risk. Saha Union Public is currently generating about -0.18 per unit of risk. If you would invest 302.00 in TMT Steel Public on January 11, 2025 and sell it today you would lose (6.00) from holding TMT Steel Public or give up 1.99% 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. Saha Union Public
Performance |
| Timeline |
| TMT Steel Public |
| Saha Union Public |
TMT Steel and Saha Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TMT Steel and Saha Union
The main advantage of trading using opposite TMT Steel and Saha Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TMT Steel position performs unexpectedly, Saha Union 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 Saha Union will offset losses from the drop in Saha Union's long position.| TMT Steel vs. Dynasty Ceramic Public | TMT Steel vs. Cal Comp Electronics Public | TMT Steel vs. AP Public | TMT Steel vs. Dcon Products Public |
| Saha Union vs. Tycoons Worldwide Group | Saha Union vs. Siam Steel Service | Saha Union vs. Thai Nam Plastic | Saha Union vs. IVF |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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