Correlation Between Siamgas and DAIRY FARM
Can any of the company-specific risk be diversified away by investing in both Siamgas and DAIRY FARM 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 DAIRY FARM 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 DAIRY FARM INTL, you can compare the effects of market volatilities on Siamgas and DAIRY FARM 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 DAIRY FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and DAIRY FARM.
Diversification Opportunities for Siamgas and DAIRY FARM
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siamgas and DAIRY is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and DAIRY FARM INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIRY FARM INTL 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 DAIRY FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIRY FARM INTL has no effect on the direction of Siamgas i.e., Siamgas and DAIRY FARM go up and down completely randomly.
Pair Corralation between Siamgas and DAIRY FARM
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 3.16 times more return on investment than DAIRY FARM. However, Siamgas is 3.16 times more volatile than DAIRY FARM INTL. It trades about 0.04 of its potential returns per unit of risk. DAIRY FARM INTL is currently generating about 0.0 per unit of risk. If you would invest 11.00 in Siamgas And Petrochemicals on September 23, 2024 and sell it today you would earn a total of 7.00 from holding Siamgas And Petrochemicals or generate 63.64% 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. DAIRY FARM INTL
Performance |
| Timeline |
| Siamgas And Petroche |
| DAIRY FARM INTL |
Siamgas and DAIRY FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and DAIRY FARM
The main advantage of trading using opposite Siamgas and DAIRY FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, DAIRY FARM 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 DAIRY FARM will offset losses from the drop in DAIRY FARM's long position.The idea behind Siamgas And Petrochemicals and DAIRY FARM INTL 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.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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