Correlation Between Kang Yong and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Kang Yong 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 Kang Yong and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kang Yong Electric and The Siam Cement, you can compare the effects of market volatilities on Kang Yong 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 Kang Yong with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kang Yong and Siam Cement.
Diversification Opportunities for Kang Yong and Siam Cement
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kang and Siam is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kang Yong Electric and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Kang Yong 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 Kang Yong Electric 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 Kang Yong i.e., Kang Yong and Siam Cement go up and down completely randomly.
Pair Corralation between Kang Yong and Siam Cement
Assuming the 90 days trading horizon Kang Yong Electric is expected to generate 0.04 times more return on investment than Siam Cement. However, Kang Yong Electric is 26.89 times less risky than Siam Cement. It trades about -0.1 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.21 per unit of risk. If you would invest 29,200 in Kang Yong Electric on August 24, 2024 and sell it today you would lose (200.00) from holding Kang Yong Electric or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kang Yong Electric vs. The Siam Cement
Performance |
| Timeline |
| Kang Yong Electric |
| Siam Cement |
Kang Yong and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kang Yong and Siam Cement
The main advantage of trading using opposite Kang Yong and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kang Yong 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.| Kang Yong vs. SCB X Public | Kang Yong vs. Kasikornbank Public | Kang Yong vs. PTT Public | Kang Yong vs. Kasikornbank Public |
| Siam Cement vs. Megachem Public | Siam Cement vs. NCL International Logistics | Siam Cement vs. The Erawan Group | Siam Cement vs. Airports of Thailand |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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