Correlation Between Chow Steel and CIMB Thai

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

By analyzing existing cross correlation between Chow Steel Industries and CIMB Thai Bank, you can compare the effects of market volatilities on Chow Steel and CIMB Thai 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 Chow Steel with a short position of CIMB Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chow Steel and CIMB Thai.

Diversification Opportunities for Chow Steel and CIMB Thai

0.12

Correlation Coefficient

Chow Steel  CIMB Thai

Average diversification

The 3 months correlation between Chow and CIMB is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chow Steel Industries and CIMB Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMB Thai Bank and Chow 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 Chow Steel Industries are associated (or correlated) with CIMB Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMB Thai Bank has no effect on the direction of Chow Steel i.e., Chow Steel and CIMB Thai go up and down completely randomly.

Pair Corralation between Chow Steel and CIMB Thai

Assuming the 90 days trading horizon Chow Steel Industries is expected to generate 1.87 times more return on investment than CIMB Thai. However, Chow Steel is 1.87 times more volatile than CIMB Thai Bank. It trades about 0.09 of its potential returns per unit of risk. CIMB Thai Bank is currently generating about -0.17 per unit of risk. If you would invest  126.00  in Chow Steel Industries on April 23, 2025 and sell it today you would earn a total of  38.00  from holding Chow Steel Industries or generate 30.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Chow Steel Industries  vs.  CIMB Thai Bank

Chow Steel Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chow Steel Industries are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Chow Steel disclosed solid returns over the last few months and may actually be approaching a breakup point.

CIMB Thai Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIMB Thai Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Chow Steel and CIMB Thai

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

The idea behind Chow Steel Industries and CIMB Thai Bank 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..