Correlation Between Goodyear Public and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Goodyear Public 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 Goodyear Public and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodyear Public and The Siam Cement, you can compare the effects of market volatilities on Goodyear Public 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 Goodyear Public with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodyear Public and Siam Cement.
Diversification Opportunities for Goodyear Public and Siam Cement
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goodyear and Siam is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear Public and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Goodyear Public 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 Goodyear Public 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 Goodyear Public i.e., Goodyear Public and Siam Cement go up and down completely randomly.
Pair Corralation between Goodyear Public and Siam Cement
Assuming the 90 days trading horizon Goodyear Public is expected to generate 0.23 times more return on investment than Siam Cement. However, Goodyear Public is 4.41 times less risky than Siam Cement. It trades about 0.25 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.22 per unit of risk. If you would invest 15,750 in Goodyear Public on August 27, 2024 and sell it today you would earn a total of 1,650 from holding Goodyear Public or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodyear Public vs. The Siam Cement
Performance |
| Timeline |
| Goodyear Public |
| Siam Cement |
Goodyear Public and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodyear Public and Siam Cement
The main advantage of trading using opposite Goodyear Public and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Public 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.| Goodyear Public vs. Inoue Rubber Public | Goodyear Public vs. Haad Thip Public | Goodyear Public vs. Hwa Fong Rubber | Goodyear Public vs. ICC International Public |
| Siam Cement vs. NCL International Logistics | Siam Cement vs. The Erawan Group | Siam Cement vs. Airports of Thailand | Siam Cement vs. Eastern Technical Engineering |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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