Correlation Between Food Life and Siamgas
Can any of the company-specific risk be diversified away by investing in both Food Life and Siamgas 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 Food Life and Siamgas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and Siamgas And Petrochemicals, you can compare the effects of market volatilities on Food Life and Siamgas 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 Food Life with a short position of Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and Siamgas.
Diversification Opportunities for Food Life and Siamgas
Very good diversification
The 3 months correlation between Food and Siamgas is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche and Food Life 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 Food Life Companies are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of Food Life i.e., Food Life and Siamgas go up and down completely randomly.
Pair Corralation between Food Life and Siamgas
Assuming the 90 days horizon Food Life Companies is expected to generate 0.42 times more return on investment than Siamgas. However, Food Life Companies is 2.37 times less risky than Siamgas. It trades about 0.18 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.0 per unit of risk. If you would invest 1,470 in Food Life Companies on January 15, 2025 and sell it today you would earn a total of 1,410 from holding Food Life Companies or generate 95.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Food Life Companies vs. Siamgas And Petrochemicals
Performance |
| Timeline |
| Food Life Companies |
| Siamgas And Petroche |
Food Life and Siamgas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and Siamgas
The main advantage of trading using opposite Food Life and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life position performs unexpectedly, Siamgas 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 Siamgas will offset losses from the drop in Siamgas' long position.| Food Life vs. EITZEN CHEMICALS | Food Life vs. PARKEN Sport Entertainment | Food Life vs. Gaztransport Technigaz SA | Food Life vs. Strong Petrochemical Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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