Correlation Between Ford and Siam City
Can any of the company-specific risk be diversified away by investing in both Ford and Siam City 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 Ford and Siam City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Siam City Cement, you can compare the effects of market volatilities on Ford and Siam City 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 Ford with a short position of Siam City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Siam City.
Diversification Opportunities for Ford and Siam City
Good diversification
The 3 months correlation between Ford and Siam is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Siam City Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam City Cement and Ford 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 Ford Motor are associated (or correlated) with Siam City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam City Cement has no effect on the direction of Ford i.e., Ford and Siam City go up and down completely randomly.
Pair Corralation between Ford and Siam City
Taking into account the 90-day investment horizon Ford is expected to generate 179.52 times less return on investment than Siam City. But when comparing it to its historical volatility, Ford Motor is 28.1 times less risky than Siam City. It trades about 0.01 of its potential returns per unit of risk. Siam City Cement is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,650 in Siam City Cement on September 3, 2024 and sell it today you would earn a total of 1,550 from holding Siam City Cement or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Ford Motor vs. Siam City Cement
Performance |
| Timeline |
| Ford Motor |
| Siam City Cement |
Ford and Siam City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Siam City
The main advantage of trading using opposite Ford and Siam City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Siam City 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 City will offset losses from the drop in Siam City's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Siam City vs. SCG PACKAGING PCL NVDR | Siam City vs. The Siam Cement | Siam City vs. Kasikornbank Public | Siam City vs. PTT Exploration and |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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