Correlation Between Lohakit Metal and Siam Steel

Can any of the company-specific risk be diversified away by investing in both Lohakit Metal and Siam 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 Lohakit Metal and Siam Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lohakit Metal Public and Siam Steel Service, you can compare the effects of market volatilities on Lohakit Metal and Siam 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 Lohakit Metal with a short position of Siam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohakit Metal and Siam Steel.

Diversification Opportunities for Lohakit Metal and Siam Steel

0.65

Correlation Coefficient

Lohakit Metal  Siam Steel

Poor diversification

The 3 months correlation between Lohakit and Siam is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lohakit Metal Public and Siam Steel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel Service and Lohakit Metal 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 Lohakit Metal Public are associated (or correlated) with Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel Service has no effect on the direction of Lohakit Metal i.e., Lohakit Metal and Siam Steel go up and down completely randomly.

Pair Corralation between Lohakit Metal and Siam Steel

Assuming the 90 days trading horizon Lohakit Metal Public is expected to generate 0.47 times more return on investment than Siam Steel. However, Lohakit Metal Public is 2.11 times less risky than Siam Steel. It trades about -0.1 of its potential returns per unit of risk. Siam Steel Service is currently generating about -0.13 per unit of risk. If you would invest  388.00  in Lohakit Metal Public on September 16, 2024 and sell it today you would lose (18.00) from holding Lohakit Metal Public or give up 4.64% of portfolio value over 90 days.

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

Lohakit Metal Public  vs.  Siam Steel Service

Lohakit Metal Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Siam Steel Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Steel Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Lohakit Metal and Siam Steel

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

The idea behind Lohakit Metal Public and Siam Steel Service 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.