Correlation Between GM and Siam Cement
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and The Siam Cement, you can compare the effects of market volatilities on GM 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 GM with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Siam Cement.
Diversification Opportunities for GM and Siam Cement
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GM and Siam is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and GM 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 General Motors 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 GM i.e., GM and Siam Cement go up and down completely randomly.
Pair Corralation between GM and Siam Cement
If you would invest 5,034 in General Motors on October 20, 2024 and sell it today you would earn a total of 63.00 from holding General Motors or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
General Motors vs. The Siam Cement
Performance |
| Timeline |
| General Motors |
| Siam Cement |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GM and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Siam Cement
The main advantage of trading using opposite GM and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.The idea behind General Motors and The Siam Cement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Siam Cement vs. Chart Industries | Siam Cement vs. Gatos Silver | Siam Cement vs. Everus Construction Group | Siam Cement vs. Summit Materials |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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