Correlation Between Nfc PLC and Siam City
Can any of the company-specific risk be diversified away by investing in both Nfc PLC and Siam City 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 Nfc PLC and Siam City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nfc PLC and Siam City Cement, you can compare the effects of market volatilities on Nfc PLC and Siam City 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 Nfc PLC with a short position of Siam City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nfc PLC and Siam City.
Diversification Opportunities for Nfc PLC and Siam City
Very poor diversification
The 3 months correlation between Nfc and Siam is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nfc PLC and Siam City Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam City Cement and Nfc PLC 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 Nfc PLC are associated (or correlated) with Siam City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam City Cement has no effect on the direction of Nfc PLC i.e., Nfc PLC and Siam City go up and down completely randomly.
Pair Corralation between Nfc PLC and Siam City
Assuming the 90 days trading horizon Nfc PLC is expected to under-perform the Siam City. In addition to that, Nfc PLC is 8.16 times more volatile than Siam City Cement. It trades about -0.03 of its total potential returns per unit of risk. Siam City Cement is currently generating about -0.15 per unit of volatility. If you would invest 16,300 in Siam City Cement on October 23, 2024 and sell it today you would lose (200.00) from holding Siam City Cement or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nfc PLC vs. Siam City Cement
Performance |
| Timeline |
| Nfc PLC |
| Siam City Cement |
Nfc PLC and Siam City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nfc PLC and Siam City
The main advantage of trading using opposite Nfc PLC and Siam City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nfc PLC position performs unexpectedly, Siam City 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 City will offset losses from the drop in Siam City's long position.| Nfc PLC vs. Lam Soon Public | Nfc PLC vs. Newcity Public | Nfc PLC vs. Metro Systems | Nfc PLC vs. Nonthavej Hospital Public |
| Siam City vs. The Siam Cement | Siam City vs. SCB X Public | Siam City vs. Bangkok Bank Public | Siam City vs. PTT 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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