Correlation Between EDP Renovaveis and Siam Cement
Can any of the company-specific risk be diversified away by investing in both EDP Renovaveis 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 EDP Renovaveis and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDP Renovaveis and The Siam Cement, you can compare the effects of market volatilities on EDP Renovaveis 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 EDP Renovaveis with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDP Renovaveis and Siam Cement.
Diversification Opportunities for EDP Renovaveis and Siam Cement
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EDP and Siam is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding EDP Renovaveis and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and EDP Renovaveis 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 EDP Renovaveis 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 EDP Renovaveis i.e., EDP Renovaveis and Siam Cement go up and down completely randomly.
Pair Corralation between EDP Renovaveis and Siam Cement
Assuming the 90 days horizon EDP Renovaveis is expected to under-perform the Siam Cement. In addition to that, EDP Renovaveis is 44.41 times more volatile than The Siam Cement. It trades about -0.26 of its total potential returns per unit of risk. The Siam Cement is currently generating about 0.13 per unit of volatility. If you would invest 715.00 in The Siam Cement on September 12, 2024 and sell it today you would earn a total of 3.00 from holding The Siam Cement or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EDP Renovaveis vs. The Siam Cement
Performance |
| Timeline |
| EDP Renovaveis |
| Siam Cement |
EDP Renovaveis and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDP Renovaveis and Siam Cement
The main advantage of trading using opposite EDP Renovaveis and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDP Renovaveis 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.| EDP Renovaveis vs. Brookfield Renewable Partners | EDP Renovaveis vs. Clearway Energy Class | EDP Renovaveis vs. Atlantica Sustainable Infrastructure | EDP Renovaveis vs. Nextera Energy Partners |
| Siam Cement vs. EDP Energias | Siam Cement vs. CP ALL Public | Siam Cement vs. Niagara Mohawk Power | Siam Cement vs. Oaktree Capital Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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