Correlation Between Siamgas and NIPPON MEAT
Can any of the company-specific risk be diversified away by investing in both Siamgas and NIPPON MEAT 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 NIPPON MEAT 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 NIPPON MEAT PACKERS, you can compare the effects of market volatilities on Siamgas and NIPPON MEAT 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 NIPPON MEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and NIPPON MEAT.
Diversification Opportunities for Siamgas and NIPPON MEAT
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siamgas and NIPPON is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and NIPPON MEAT PACKERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIPPON MEAT PACKERS 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 NIPPON MEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIPPON MEAT PACKERS has no effect on the direction of Siamgas i.e., Siamgas and NIPPON MEAT go up and down completely randomly.
Pair Corralation between Siamgas and NIPPON MEAT
Assuming the 90 days trading horizon Siamgas is expected to generate 2.63 times less return on investment than NIPPON MEAT. In addition to that, Siamgas is 1.22 times more volatile than NIPPON MEAT PACKERS. It trades about 0.01 of its total potential returns per unit of risk. NIPPON MEAT PACKERS is currently generating about 0.05 per unit of volatility. If you would invest 3,160 in NIPPON MEAT PACKERS on September 1, 2024 and sell it today you would earn a total of 60.00 from holding NIPPON MEAT PACKERS or generate 1.9% 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. NIPPON MEAT PACKERS
Performance |
| Timeline |
| Siamgas And Petroche |
| NIPPON MEAT PACKERS |
Siamgas and NIPPON MEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and NIPPON MEAT
The main advantage of trading using opposite Siamgas and NIPPON MEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, NIPPON MEAT 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 NIPPON MEAT will offset losses from the drop in NIPPON MEAT's long position.The idea behind Siamgas And Petrochemicals and NIPPON MEAT PACKERS 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.| NIPPON MEAT vs. GEAR4MUSIC LS 10 | NIPPON MEAT vs. Algonquin Power Utilities | NIPPON MEAT vs. COMPUTERSHARE | NIPPON MEAT vs. Entravision Communications |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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