Correlation Between Cho Thavee and KC Metalsheet

Can any of the company-specific risk be diversified away by investing in both Cho Thavee and KC Metalsheet 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 Cho Thavee and KC Metalsheet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cho Thavee Public and KC Metalsheet Public, you can compare the effects of market volatilities on Cho Thavee and KC Metalsheet 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 Cho Thavee with a short position of KC Metalsheet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cho Thavee and KC Metalsheet.

Diversification Opportunities for Cho Thavee and KC Metalsheet

0.55

Correlation Coefficient

Cho Thavee  KC Metalsheet

Very weak diversification

The 3 months correlation between Cho and KCM is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cho Thavee Public and KC Metalsheet Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KC Metalsheet Public and Cho Thavee 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 Cho Thavee Public are associated (or correlated) with KC Metalsheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KC Metalsheet Public has no effect on the direction of Cho Thavee i.e., Cho Thavee and KC Metalsheet go up and down completely randomly.

Pair Corralation between Cho Thavee and KC Metalsheet

Assuming the 90 days trading horizon Cho Thavee Public is expected to under-perform the KC Metalsheet. In addition to that, Cho Thavee is 2.2 times more volatile than KC Metalsheet Public. It trades about 0.0 of its total potential returns per unit of risk. KC Metalsheet Public is currently generating about 0.03 per unit of volatility. If you would invest  29.00  in KC Metalsheet Public on September 5, 2024 and sell it today you would earn a total of  1.00  from holding KC Metalsheet Public or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cho Thavee Public  vs.  KC Metalsheet Public

Cho Thavee Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cho Thavee Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Cho Thavee is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

KC Metalsheet Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KC Metalsheet Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak primary indicators, KC Metalsheet may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cho Thavee and KC Metalsheet

The main advantage of trading using opposite Cho Thavee and KC Metalsheet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cho Thavee position performs unexpectedly, KC Metalsheet 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 KC Metalsheet will offset losses from the drop in KC Metalsheet's long position.

The idea behind Cho Thavee Public and KC Metalsheet Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.