Correlation Between NAT ABSOLUTE and Siam Cement
Can any of the company-specific risk be diversified away by investing in both NAT ABSOLUTE 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 NAT ABSOLUTE and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAT ABSOLUTE TECHNOLOGIES and The Siam Cement, you can compare the effects of market volatilities on NAT ABSOLUTE 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 NAT ABSOLUTE with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAT ABSOLUTE and Siam Cement.
Diversification Opportunities for NAT ABSOLUTE and Siam Cement
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NAT and Siam is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NAT ABSOLUTE TECHNOLOGIES and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and NAT ABSOLUTE 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 NAT ABSOLUTE TECHNOLOGIES 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 NAT ABSOLUTE i.e., NAT ABSOLUTE and Siam Cement go up and down completely randomly.
Pair Corralation between NAT ABSOLUTE and Siam Cement
Assuming the 90 days trading horizon NAT ABSOLUTE TECHNOLOGIES is expected to generate 2.57 times more return on investment than Siam Cement. However, NAT ABSOLUTE is 2.57 times more volatile than The Siam Cement. It trades about -0.03 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.11 per unit of risk. If you would invest 656.00 in NAT ABSOLUTE TECHNOLOGIES on September 4, 2024 and sell it today you would lose (196.00) from holding NAT ABSOLUTE TECHNOLOGIES or give up 29.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 81.25% |
| Values | Daily Returns |
NAT ABSOLUTE TECHNOLOGIES vs. The Siam Cement
Performance |
| Timeline |
| NAT ABSOLUTE TECHNOLOGIES |
| Siam Cement |
NAT ABSOLUTE and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAT ABSOLUTE and Siam Cement
The main advantage of trading using opposite NAT ABSOLUTE and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAT ABSOLUTE 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.| NAT ABSOLUTE vs. Delta Electronics Public | NAT ABSOLUTE vs. Delta Electronics Public | NAT ABSOLUTE vs. Airports of Thailand | NAT ABSOLUTE vs. Airports of Thailand |
| Siam Cement vs. Eastern Technical Engineering | Siam Cement vs. General Environmental Conservation | Siam Cement vs. Silicon Craft Technology | Siam Cement vs. NAT ABSOLUTE TECHNOLOGIES |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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