Correlation Between Mena Transport and Siam Technic
Can any of the company-specific risk be diversified away by investing in both Mena Transport and Siam Technic 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 Mena Transport and Siam Technic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mena Transport Public and Siam Technic Concrete, you can compare the effects of market volatilities on Mena Transport and Siam Technic 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 Mena Transport with a short position of Siam Technic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and Siam Technic.
Diversification Opportunities for Mena Transport and Siam Technic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mena and Siam is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and Siam Technic Concrete in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Technic Concrete and Mena Transport 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 Mena Transport Public are associated (or correlated) with Siam Technic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Technic Concrete has no effect on the direction of Mena Transport i.e., Mena Transport and Siam Technic go up and down completely randomly.
Pair Corralation between Mena Transport and Siam Technic
Assuming the 90 days trading horizon Mena Transport Public is expected to generate 0.91 times more return on investment than Siam Technic. However, Mena Transport Public is 1.09 times less risky than Siam Technic. It trades about 0.04 of its potential returns per unit of risk. Siam Technic Concrete is currently generating about -0.08 per unit of risk. If you would invest 122.00 in Mena Transport Public on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Mena Transport Public or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mena Transport Public vs. Siam Technic Concrete
Performance |
| Timeline |
| Mena Transport Public |
| Siam Technic Concrete |
Mena Transport and Siam Technic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mena Transport and Siam Technic
The main advantage of trading using opposite Mena Transport and Siam Technic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, Siam Technic 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 Technic will offset losses from the drop in Siam Technic's long position.| Mena Transport vs. Namyong Terminal PCL | Mena Transport vs. Hwa Fong Rubber | Mena Transport vs. Jay Mart Public | Mena Transport vs. IRPC Public |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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