Correlation Between CSP Steel and Bangsaphan Barmill

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

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

Diversification Opportunities for CSP Steel and Bangsaphan Barmill

0.19

Correlation Coefficient

CSP Steel  Bangsaphan Barmill

Average diversification

The 3 months correlation between CSP and Bangsaphan is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CSP Steel Center and Bangsaphan Barmill Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangsaphan Barmill Public and CSP 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 CSP Steel Center are associated (or correlated) with Bangsaphan Barmill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangsaphan Barmill Public has no effect on the direction of CSP Steel i.e., CSP Steel and Bangsaphan Barmill go up and down completely randomly.

Pair Corralation between CSP Steel and Bangsaphan Barmill

Assuming the 90 days trading horizon CSP Steel Center is expected to generate 3.74 times more return on investment than Bangsaphan Barmill. However, CSP Steel is 3.74 times more volatile than Bangsaphan Barmill Public. It trades about 0.08 of its potential returns per unit of risk. Bangsaphan Barmill Public is currently generating about -0.01 per unit of risk. If you would invest  45.00  in CSP Steel Center on April 22, 2025 and sell it today you would earn a total of  9.00  from holding CSP Steel Center or generate 20.0% return on investment over 90 days.

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

CSP Steel Center  vs.  Bangsaphan Barmill Public

CSP Steel Center

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSP Steel Center are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, CSP Steel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Bangsaphan Barmill Public

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CSP Steel and Bangsaphan Barmill

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

The idea behind CSP Steel Center and Bangsaphan Barmill 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.