Correlation Between Siamgas and INDIKA ENERGY
Can any of the company-specific risk be diversified away by investing in both Siamgas and INDIKA ENERGY 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 INDIKA ENERGY 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 INDIKA ENERGY, you can compare the effects of market volatilities on Siamgas and INDIKA ENERGY 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 INDIKA ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and INDIKA ENERGY.
Diversification Opportunities for Siamgas and INDIKA ENERGY
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siamgas and INDIKA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and INDIKA ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDIKA ENERGY 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 INDIKA ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDIKA ENERGY has no effect on the direction of Siamgas i.e., Siamgas and INDIKA ENERGY go up and down completely randomly.
Pair Corralation between Siamgas and INDIKA ENERGY
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 2.04 times more return on investment than INDIKA ENERGY. However, Siamgas is 2.04 times more volatile than INDIKA ENERGY. It trades about 0.04 of its potential returns per unit of risk. INDIKA ENERGY is currently generating about -0.02 per unit of risk. If you would invest 11.00 in Siamgas And Petrochemicals on September 4, 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 Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Siamgas And Petrochemicals vs. INDIKA ENERGY
Performance |
| Timeline |
| Siamgas And Petroche |
| INDIKA ENERGY |
Siamgas and INDIKA ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and INDIKA ENERGY
The main advantage of trading using opposite Siamgas and INDIKA ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, INDIKA ENERGY 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 INDIKA ENERGY will offset losses from the drop in INDIKA ENERGY's long position.The idea behind Siamgas And Petrochemicals and INDIKA ENERGY 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.| INDIKA ENERGY vs. KAUFMAN ET BROAD | INDIKA ENERGY vs. Liberty Broadband | INDIKA ENERGY vs. Ribbon Communications | INDIKA ENERGY vs. Consolidated Communications Holdings |
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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