Correlation Between Siamgas and HOME DEPOT
Can any of the company-specific risk be diversified away by investing in both Siamgas and HOME DEPOT 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 HOME DEPOT 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 HOME DEPOT, you can compare the effects of market volatilities on Siamgas and HOME DEPOT 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 HOME DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and HOME DEPOT.
Diversification Opportunities for Siamgas and HOME DEPOT
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Siamgas and HOME is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and HOME DEPOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME DEPOT 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 HOME DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME DEPOT has no effect on the direction of Siamgas i.e., Siamgas and HOME DEPOT go up and down completely randomly.
Pair Corralation between Siamgas and HOME DEPOT
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 0.89 times more return on investment than HOME DEPOT. However, Siamgas And Petrochemicals is 1.12 times less risky than HOME DEPOT. It trades about 0.21 of its potential returns per unit of risk. HOME DEPOT is currently generating about 0.16 per unit of risk. If you would invest 18.00 in Siamgas And Petrochemicals on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Siamgas And Petrochemicals or generate 5.56% 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. HOME DEPOT
Performance |
| Timeline |
| Siamgas And Petroche |
| HOME DEPOT |
Siamgas and HOME DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and HOME DEPOT
The main advantage of trading using opposite Siamgas and HOME DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, HOME DEPOT 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 HOME DEPOT will offset losses from the drop in HOME DEPOT's long position.| Siamgas vs. SIVERS SEMICONDUCTORS AB | Siamgas vs. NorAm Drilling AS | Siamgas vs. Volkswagen AG | Siamgas vs. Darden Restaurants |
| HOME DEPOT vs. DICKS Sporting Goods | HOME DEPOT vs. Hemisphere Energy Corp | HOME DEPOT vs. Zoom Video Communications | HOME DEPOT vs. USWE SPORTS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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