Correlation Between Siamgas and Takara Holdings
Can any of the company-specific risk be diversified away by investing in both Siamgas and Takara Holdings 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 Takara Holdings 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 Takara Holdings, you can compare the effects of market volatilities on Siamgas and Takara Holdings 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 Takara Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and Takara Holdings.
Diversification Opportunities for Siamgas and Takara Holdings
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Siamgas and Takara is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and Takara Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takara Holdings 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 Takara Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takara Holdings has no effect on the direction of Siamgas i.e., Siamgas and Takara Holdings go up and down completely randomly.
Pair Corralation between Siamgas and Takara Holdings
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 4.78 times more return on investment than Takara Holdings. However, Siamgas is 4.78 times more volatile than Takara Holdings. It trades about 0.04 of its potential returns per unit of risk. Takara Holdings is currently generating about 0.09 per unit of risk. If you would invest 16.00 in Siamgas And Petrochemicals on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Siamgas And Petrochemicals or generate 6.25% 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. Takara Holdings
Performance |
| Timeline |
| Siamgas And Petroche |
| Takara Holdings |
Siamgas and Takara Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and Takara Holdings
The main advantage of trading using opposite Siamgas and Takara Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, Takara Holdings 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 Takara Holdings will offset losses from the drop in Takara Holdings' long position.The idea behind Siamgas And Petrochemicals and Takara Holdings 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.| Takara Holdings vs. Aedas Homes SA | Takara Holdings vs. American Homes 4 | Takara Holdings vs. Addus HomeCare | Takara Holdings vs. Siamgas And Petrochemicals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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