Correlation Between LAir Liquide and Siam Cement
Can any of the company-specific risk be diversified away by investing in both LAir Liquide 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 LAir Liquide and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAir Liquide SA and The Siam Cement, you can compare the effects of market volatilities on LAir Liquide 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 LAir Liquide with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and Siam Cement.
Diversification Opportunities for LAir Liquide and Siam Cement
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LAir and Siam is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and LAir Liquide 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 LAir Liquide SA 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 LAir Liquide i.e., LAir Liquide and Siam Cement go up and down completely randomly.
Pair Corralation between LAir Liquide and Siam Cement
Assuming the 90 days horizon LAir Liquide is expected to generate 20.6 times less return on investment than Siam Cement. But when comparing it to its historical volatility, LAir Liquide SA is 4.97 times less risky than Siam Cement. It trades about 0.01 of its potential returns per unit of risk. The Siam Cement is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 575.00 in The Siam Cement on September 14, 2024 and sell it today you would earn a total of 65.00 from holding The Siam Cement or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 67.16% |
| Values | Daily Returns |
LAir Liquide SA vs. The Siam Cement
Performance |
| Timeline |
| LAir Liquide SA |
| Siam Cement |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LAir Liquide and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and Siam Cement
The main advantage of trading using opposite LAir Liquide and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide 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.| LAir Liquide vs. Asia Carbon Industries | LAir Liquide vs. Akzo Nobel NV | LAir Liquide vs. Avoca LLC | LAir Liquide vs. AGC Inc ADR |
| Siam Cement vs. AerSale Corp | Siam Cement vs. The Gap, | Siam Cement vs. LB Foster | Siam Cement vs. Pentair PLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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