Correlation Between AJ Plast and Siam Cement
Can any of the company-specific risk be diversified away by investing in both AJ Plast 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 AJ Plast and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Plast Public and The Siam Cement, you can compare the effects of market volatilities on AJ Plast 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 AJ Plast with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Plast and Siam Cement.
Diversification Opportunities for AJ Plast and Siam Cement
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AJ Plast and Siam is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding AJ Plast 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 AJ Plast 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 AJ Plast 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 AJ Plast i.e., AJ Plast and Siam Cement go up and down completely randomly.
Pair Corralation between AJ Plast and Siam Cement
Assuming the 90 days horizon AJ Plast Public is expected to generate 0.65 times more return on investment than Siam Cement. However, AJ Plast Public is 1.55 times less risky than Siam Cement. It trades about -0.25 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.35 per unit of risk. If you would invest 510.00 in AJ Plast Public on September 2, 2024 and sell it today you would lose (30.00) from holding AJ Plast Public or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJ Plast Public vs. The Siam Cement
Performance |
| Timeline |
| AJ Plast Public |
| Siam Cement |
AJ Plast and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Plast and Siam Cement
The main advantage of trading using opposite AJ Plast and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Plast 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.| AJ Plast vs. AAPICO Hitech Public | AJ Plast vs. AP Public | AJ Plast vs. Aikchol Hospital Public | AJ Plast vs. Bank of Ayudhya |
| Siam Cement vs. Healthlead Public | Siam Cement vs. Information and Communication | Siam Cement vs. Copperwired Public | Siam Cement vs. Turnkey Communication Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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