Correlation Between Mega Lifesciences and Siam Wellness
Can any of the company-specific risk be diversified away by investing in both Mega Lifesciences and Siam Wellness 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 Mega Lifesciences and Siam Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mega Lifesciences Public and Siam Wellness Group, you can compare the effects of market volatilities on Mega Lifesciences and Siam Wellness 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 Mega Lifesciences with a short position of Siam Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Lifesciences and Siam Wellness.
Diversification Opportunities for Mega Lifesciences and Siam Wellness
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mega and Siam is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mega Lifesciences Public and Siam Wellness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Wellness Group and Mega Lifesciences 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 Mega Lifesciences Public are associated (or correlated) with Siam Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Wellness Group has no effect on the direction of Mega Lifesciences i.e., Mega Lifesciences and Siam Wellness go up and down completely randomly.
Pair Corralation between Mega Lifesciences and Siam Wellness
Assuming the 90 days trading horizon Mega Lifesciences Public is expected to under-perform the Siam Wellness. But the stock apears to be less risky and, when comparing its historical volatility, Mega Lifesciences Public is 1.26 times less risky than Siam Wellness. The stock trades about -0.03 of its potential returns per unit of risk. The Siam Wellness Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 752.00 in Siam Wellness Group on September 3, 2024 and sell it today you would lose (32.00) from holding Siam Wellness Group or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mega Lifesciences Public vs. Siam Wellness Group
Performance |
| Timeline |
| Mega Lifesciences Public |
| Siam Wellness Group |
Mega Lifesciences and Siam Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mega Lifesciences and Siam Wellness
The main advantage of trading using opposite Mega Lifesciences and Siam Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Lifesciences position performs unexpectedly, Siam Wellness 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 Wellness will offset losses from the drop in Siam Wellness' long position.| Mega Lifesciences vs. Home Product Center | Mega Lifesciences vs. Minor International Public | Mega Lifesciences vs. Com7 PCL | Mega Lifesciences vs. Bangkok Dusit Medical |
| Siam Wellness vs. Minor International Public | Siam Wellness vs. Central Plaza Hotel | Siam Wellness vs. The Erawan Group | Siam Wellness vs. After You 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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