Correlation Between DFS Furniture and Siamgas
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Siamgas 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 DFS Furniture and Siamgas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Siamgas And Petrochemicals, you can compare the effects of market volatilities on DFS Furniture and Siamgas 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 DFS Furniture with a short position of Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Siamgas.
Diversification Opportunities for DFS Furniture and Siamgas
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DFS and Siamgas is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche and DFS Furniture 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 DFS Furniture PLC are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of DFS Furniture i.e., DFS Furniture and Siamgas go up and down completely randomly.
Pair Corralation between DFS Furniture and Siamgas
Assuming the 90 days trading horizon DFS Furniture is expected to generate 1.57 times less return on investment than Siamgas. But when comparing it to its historical volatility, DFS Furniture PLC is 2.41 times less risky than Siamgas. It trades about 0.04 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Siamgas And Petrochemicals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Siamgas And Petrochemicals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Siamgas And Petrochemicals
Performance |
| Timeline |
| DFS Furniture PLC |
| Siamgas And Petroche |
DFS Furniture and Siamgas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Siamgas
The main advantage of trading using opposite DFS Furniture and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Siamgas 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 Siamgas will offset losses from the drop in Siamgas' long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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