Correlation Between Siamgas and AMAG AUSTRIA
Can any of the company-specific risk be diversified away by investing in both Siamgas and AMAG AUSTRIA 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 Siamgas and AMAG AUSTRIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siamgas And Petrochemicals and AMAG AUSTRIA M, you can compare the effects of market volatilities on Siamgas and AMAG AUSTRIA 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 Siamgas with a short position of AMAG AUSTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and AMAG AUSTRIA.
Diversification Opportunities for Siamgas and AMAG AUSTRIA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siamgas and AMAG is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and AMAG AUSTRIA M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG AUSTRIA M and Siamgas 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 Siamgas And Petrochemicals are associated (or correlated) with AMAG AUSTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG AUSTRIA M has no effect on the direction of Siamgas i.e., Siamgas and AMAG AUSTRIA go up and down completely randomly.
Pair Corralation between Siamgas and AMAG AUSTRIA
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 9.75 times more return on investment than AMAG AUSTRIA. However, Siamgas is 9.75 times more volatile than AMAG AUSTRIA M. It trades about 0.04 of its potential returns per unit of risk. AMAG AUSTRIA M is currently generating about -0.06 per unit of risk. If you would invest 17.00 in Siamgas And Petrochemicals on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Siamgas And Petrochemicals or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siamgas And Petrochemicals vs. AMAG AUSTRIA M
Performance |
| Timeline |
| Siamgas And Petroche |
| AMAG AUSTRIA M |
Siamgas and AMAG AUSTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and AMAG AUSTRIA
The main advantage of trading using opposite Siamgas and AMAG AUSTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, AMAG AUSTRIA 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 AMAG AUSTRIA will offset losses from the drop in AMAG AUSTRIA's long position.The idea behind Siamgas And Petrochemicals and AMAG AUSTRIA M 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.| AMAG AUSTRIA vs. PRECISION DRILLING P | AMAG AUSTRIA vs. Siamgas And Petrochemicals | AMAG AUSTRIA vs. Sanyo Chemical Industries | AMAG AUSTRIA vs. NISSAN CHEMICAL IND |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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