Correlation Between Megachem Public and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Megachem 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 Megachem 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 Megachem Public and The Siam Cement, you can compare the effects of market volatilities on Megachem 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 Megachem Public with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megachem Public and Siam Cement.
Diversification Opportunities for Megachem Public and Siam Cement
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Megachem and Siam is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Megachem 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 Megachem 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 Megachem 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 Megachem Public i.e., Megachem Public and Siam Cement go up and down completely randomly.
Pair Corralation between Megachem Public and Siam Cement
Assuming the 90 days trading horizon Megachem Public is expected to generate 24.52 times more return on investment than Siam Cement. However, Megachem Public is 24.52 times more volatile than The Siam Cement. It trades about 0.06 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.06 per unit of risk. If you would invest 220.00 in Megachem Public on August 24, 2024 and sell it today you would lose (18.00) from holding Megachem Public or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Megachem Public vs. The Siam Cement
Performance |
| Timeline |
| Megachem Public |
| Siam Cement |
Megachem Public and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megachem Public and Siam Cement
The main advantage of trading using opposite Megachem Public and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megachem 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.| Megachem Public vs. Lalin Property Public | Megachem Public vs. Information and Communication | Megachem Public vs. MCS Steel Public | Megachem Public vs. Mega Lifesciences 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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