Correlation Between Ford and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and The Siam Cement, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Siam Cement.
Diversification Opportunities for Ford and Siam Cement
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Siam is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam 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 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 Ford i.e., Ford and Siam Cement go up and down completely randomly.
Pair Corralation between Ford and Siam Cement
Taking into account the 90-day investment horizon Ford is expected to generate 3.72 times less return on investment than Siam Cement. But when comparing it to its historical volatility, Ford Motor is 2.43 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 0.01 of returns per unit of risk over similar time horizon. If you would invest 931.00 in The Siam Cement on September 3, 2024 and sell it today you would lose (213.00) from holding The Siam Cement or give up 22.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.91% |
| Values | Daily Returns |
Ford Motor vs. The Siam Cement
Performance |
| Timeline |
| Ford Motor |
| Siam Cement |
Ford and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Siam Cement
The main advantage of trading using opposite Ford and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Siam Cement vs. EDP Energias de | Siam Cement vs. EDP Renovaveis | Siam Cement vs. Endesa SA ADR | Siam Cement vs. Enel SpA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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