Correlation Between Lotus Retail and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Lotus Retail 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 Lotus Retail and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Retail Growth and The Siam Cement, you can compare the effects of market volatilities on Lotus Retail 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 Lotus Retail with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Retail and Siam Cement.
Diversification Opportunities for Lotus Retail and Siam Cement
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lotus and Siam is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Retail Growth and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Lotus Retail 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 Lotus Retail Growth 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 Lotus Retail i.e., Lotus Retail and Siam Cement go up and down completely randomly.
Pair Corralation between Lotus Retail and Siam Cement
Assuming the 90 days trading horizon Lotus Retail Growth is expected to generate 0.57 times more return on investment than Siam Cement. However, Lotus Retail Growth is 1.74 times less risky than Siam Cement. It trades about -0.18 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.26 per unit of risk. If you would invest 1,310 in Lotus Retail Growth on August 31, 2024 and sell it today you would lose (40.00) from holding Lotus Retail Growth or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Lotus Retail Growth vs. The Siam Cement
Performance |
| Timeline |
| Lotus Retail Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Siam Cement |
Lotus Retail and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Retail and Siam Cement
The main advantage of trading using opposite Lotus Retail and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Retail 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.| Lotus Retail vs. CPN Retail Growth | Lotus Retail vs. Ticon Freehold and | Lotus Retail vs. WHA Premium Growth | Lotus Retail vs. Major Cineplex Lifestyle |
| Siam Cement vs. Krung Thai Bank | Siam Cement vs. KTBST Mixed Leasehold | Siam Cement vs. Heng Leasing Capital | Siam Cement vs. WHA Industrial Leasehold |
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 Stocks Directory module to find actively traded stocks across global markets.
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