Correlation Between Siam Global and Home Product
Can any of the company-specific risk be diversified away by investing in both Siam Global and Home Product 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 Siam Global and Home Product into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siam Global House and Home Product Center, you can compare the effects of market volatilities on Siam Global and Home Product 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 Siam Global with a short position of Home Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Global and Home Product.
Diversification Opportunities for Siam Global and Home Product
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Siam and Home is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Siam Global House and Home Product Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Product Center and Siam Global 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 Siam Global House are associated (or correlated) with Home Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Product Center has no effect on the direction of Siam Global i.e., Siam Global and Home Product go up and down completely randomly.
Pair Corralation between Siam Global and Home Product
Assuming the 90 days trading horizon Siam Global House is expected to under-perform the Home Product. But the stock apears to be less risky and, when comparing its historical volatility, Siam Global House is 1.05 times less risky than Home Product. The stock trades about -0.06 of its potential returns per unit of risk. The Home Product Center is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 975.00 in Home Product Center on August 25, 2024 and sell it today you would earn a total of 5.00 from holding Home Product Center or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siam Global House vs. Home Product Center
Performance |
| Timeline |
| Siam Global House |
| Home Product Center |
Siam Global and Home Product Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Global and Home Product
The main advantage of trading using opposite Siam Global and Home Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Global position performs unexpectedly, Home Product 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 Home Product will offset losses from the drop in Home Product's long position.| Siam Global vs. Home Product Center | Siam Global vs. Bangkok Dusit Medical | Siam Global vs. Carabao Group Public | Siam Global vs. Global Power Synergy |
| Home Product vs. SCB X Public | Home Product vs. Kasikornbank Public | Home Product vs. PTT Public | Home Product vs. Kasikornbank Public |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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