Correlation Between United Paper and Thai Steel
Can any of the company-specific risk be diversified away by investing in both United Paper and Thai 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 United Paper and Thai Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Paper Public and Thai Steel Cable, you can compare the effects of market volatilities on United Paper and Thai 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 United Paper with a short position of Thai Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Paper and Thai Steel.
Diversification Opportunities for United Paper and Thai Steel
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Thai is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding United Paper Public and Thai Steel Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Steel Cable and United Paper 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 United Paper Public are associated (or correlated) with Thai Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Steel Cable has no effect on the direction of United Paper i.e., United Paper and Thai Steel go up and down completely randomly.
Pair Corralation between United Paper and Thai Steel
Assuming the 90 days trading horizon United Paper Public is expected to generate 38.65 times more return on investment than Thai Steel. However, United Paper is 38.65 times more volatile than Thai Steel Cable. It trades about 0.04 of its potential returns per unit of risk. Thai Steel Cable is currently generating about 0.01 per unit of risk. If you would invest 1,395 in United Paper Public on November 19, 2024 and sell it today you would lose (620.00) from holding United Paper Public or give up 44.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Paper Public vs. Thai Steel Cable
Performance |
| Timeline |
| United Paper Public |
| Thai Steel Cable |
United Paper and Thai Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Paper and Thai Steel
The main advantage of trading using opposite United Paper and Thai Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Paper position performs unexpectedly, Thai 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 Thai Steel will offset losses from the drop in Thai Steel's long position.| United Paper vs. TISCO Financial Group | United Paper vs. Thai Union Group | United Paper vs. Ratchthani Leasing Public | United Paper vs. Thai Vegetable Oil |
| Thai Steel vs. United Paper Public | Thai Steel vs. TMT Steel Public | Thai Steel vs. Thai Stanley Electric | Thai Steel vs. Inoue Rubber 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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