Correlation Between AAPICO Hitech and Siam Cement
Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and Siam Cement 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 AAPICO Hitech and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAPICO Hitech Public and The Siam Cement, you can compare the effects of market volatilities on AAPICO Hitech and Siam Cement 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 AAPICO Hitech with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and Siam Cement.
Diversification Opportunities for AAPICO Hitech and Siam Cement
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AAPICO and Siam is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and AAPICO Hitech 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 AAPICO Hitech Public are associated (or correlated) with Siam Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Cement has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and Siam Cement go up and down completely randomly.
Pair Corralation between AAPICO Hitech and Siam Cement
Assuming the 90 days horizon AAPICO Hitech Public is expected to generate 1.42 times more return on investment than Siam Cement. However, AAPICO Hitech is 1.42 times more volatile than The Siam Cement. It trades about -0.13 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.31 per unit of risk. If you would invest 2,140 in AAPICO Hitech Public on August 30, 2024 and sell it today you would lose (310.00) from holding AAPICO Hitech Public or give up 14.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAPICO Hitech Public vs. The Siam Cement
Performance |
| Timeline |
| AAPICO Hitech Public |
| Siam Cement |
AAPICO Hitech and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAPICO Hitech and Siam Cement
The main advantage of trading using opposite AAPICO Hitech and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAPICO Hitech position performs unexpectedly, Siam Cement 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 Siam Cement will offset losses from the drop in Siam Cement's long position.| AAPICO Hitech vs. CP ALL Public | AAPICO Hitech vs. Bangkok Dusit Medical | AAPICO Hitech vs. Central Pattana Public | AAPICO Hitech vs. Advanced Info Service |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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