Correlation Between Samchai Steel and CP ALL

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

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

Diversification Opportunities for Samchai Steel and CP ALL

-0.6

Correlation Coefficient

Samchai Steel  CP ALL

Excellent diversification

The 3 months correlation between Samchai and CPALL-R is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Samchai Steel Industries and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public and Samchai 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 Samchai Steel Industries are associated (or correlated) with CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of Samchai Steel i.e., Samchai Steel and CP ALL go up and down completely randomly.

Pair Corralation between Samchai Steel and CP ALL

Assuming the 90 days trading horizon Samchai Steel Industries is expected to generate 3.81 times more return on investment than CP ALL. However, Samchai Steel is 3.81 times more volatile than CP ALL Public. It trades about 0.06 of its potential returns per unit of risk. CP ALL Public is currently generating about -0.01 per unit of risk. If you would invest  15.00  in Samchai Steel Industries on April 21, 2025 and sell it today you would earn a total of  2.00  from holding Samchai Steel Industries or generate 13.33% return on investment over 90 days.

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

Samchai Steel Industries  vs.  CP ALL Public

Samchai Steel Industries

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samchai Steel Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting primary indicators, Samchai Steel disclosed solid returns over the last few months and may actually be approaching a breakup point.

CP ALL Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days CP ALL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, CP ALL is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Samchai Steel and CP ALL

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

The idea behind Samchai Steel Industries and CP ALL 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.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.