Correlation Between Siamgas and United Breweries
Can any of the company-specific risk be diversified away by investing in both Siamgas and United Breweries 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 United Breweries 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 United Breweries Co, you can compare the effects of market volatilities on Siamgas and United Breweries 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 United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and United Breweries.
Diversification Opportunities for Siamgas and United Breweries
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siamgas and United is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries 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 United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of Siamgas i.e., Siamgas and United Breweries go up and down completely randomly.
Pair Corralation between Siamgas and United Breweries
Assuming the 90 days trading horizon Siamgas is expected to generate 10.3 times less return on investment than United Breweries. In addition to that, Siamgas is 1.86 times more volatile than United Breweries Co. It trades about 0.01 of its total potential returns per unit of risk. United Breweries Co is currently generating about 0.28 per unit of volatility. If you would invest 961.00 in United Breweries Co on September 1, 2024 and sell it today you would earn a total of 99.00 from holding United Breweries Co or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siamgas And Petrochemicals vs. United Breweries Co
Performance |
| Timeline |
| Siamgas And Petroche |
| United Breweries |
Siamgas and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and United Breweries
The main advantage of trading using opposite Siamgas and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' long position.The idea behind Siamgas And Petrochemicals and United Breweries Co 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.| United Breweries vs. TYSON FOODS A | United Breweries vs. Austevoll Seafood ASA | United Breweries vs. FUTURE GAMING GRP | United Breweries vs. THAI BEVERAGE |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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