Correlation Between Siamgas and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Siamgas and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Siamgas and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and DFS Furniture.
Diversification Opportunities for Siamgas and DFS Furniture
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Siamgas and DFS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Siamgas i.e., Siamgas and DFS Furniture go up and down completely randomly.
Pair Corralation between Siamgas and DFS Furniture
Assuming the 90 days trading horizon Siamgas is expected to generate 4.92 times less return on investment than DFS Furniture. In addition to that, Siamgas is 1.55 times more volatile than DFS Furniture PLC. It trades about 0.01 of its total potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.11 per unit of volatility. If you would invest 155.00 in DFS Furniture PLC on September 1, 2024 and sell it today you would earn a total of 7.00 from holding DFS Furniture PLC or generate 4.52% 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. DFS Furniture PLC
Performance |
| Timeline |
| Siamgas And Petroche |
| DFS Furniture PLC |
Siamgas and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and DFS Furniture
The main advantage of trading using opposite Siamgas and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.The idea behind Siamgas And Petrochemicals and DFS Furniture PLC 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.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| CEOs Directory Screen CEOs from public companies around the world |