Correlation Between Chow Steel and Phatra Leasing

Can any of the company-specific risk be diversified away by investing in both Chow Steel and Phatra Leasing 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 Phatra Leasing 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 Phatra Leasing Public, you can compare the effects of market volatilities on Chow Steel and Phatra Leasing 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 Phatra Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chow Steel and Phatra Leasing.

Diversification Opportunities for Chow Steel and Phatra Leasing

-0.17

Correlation Coefficient

Chow Steel  Phatra Leasing

Good diversification

The 3 months correlation between Chow and Phatra is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Chow Steel Industries and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing Public 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 Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of Chow Steel i.e., Chow Steel and Phatra Leasing go up and down completely randomly.

Pair Corralation between Chow Steel and Phatra Leasing

Assuming the 90 days trading horizon Chow Steel Industries is expected to generate 1.88 times more return on investment than Phatra Leasing. However, Chow Steel is 1.88 times more volatile than Phatra Leasing Public. It trades about 0.1 of its potential returns per unit of risk. Phatra Leasing Public is currently generating about 0.09 per unit of risk. If you would invest  123.00  in Chow Steel Industries on April 22, 2025 and sell it today you would earn a total of  43.00  from holding Chow Steel Industries or generate 34.96% return on investment over 90 days.

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

Chow Steel Industries  vs.  Phatra Leasing Public

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 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Chow Steel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Phatra Leasing Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Phatra Leasing Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Phatra Leasing disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chow Steel and Phatra Leasing

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

The idea behind Chow Steel Industries and Phatra Leasing 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.