Correlation Between Niagara Mohawk and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Niagara Mohawk 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 Niagara Mohawk and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niagara Mohawk Power and The Siam Cement, you can compare the effects of market volatilities on Niagara Mohawk 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 Niagara Mohawk with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niagara Mohawk and Siam Cement.
Diversification Opportunities for Niagara Mohawk and Siam Cement
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Niagara and Siam is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Niagara Mohawk Power and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Niagara Mohawk 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 Niagara Mohawk Power 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 Niagara Mohawk i.e., Niagara Mohawk and Siam Cement go up and down completely randomly.
Pair Corralation between Niagara Mohawk and Siam Cement
Assuming the 90 days horizon Niagara Mohawk Power is expected to generate 0.45 times more return on investment than Siam Cement. However, Niagara Mohawk Power is 2.23 times less risky than Siam Cement. It trades about 0.08 of its potential returns per unit of risk. The Siam Cement is currently generating about 0.01 per unit of risk. If you would invest 5,542 in Niagara Mohawk Power on September 1, 2024 and sell it today you would earn a total of 658.00 from holding Niagara Mohawk Power or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Niagara Mohawk Power vs. The Siam Cement
Performance |
| Timeline |
| Niagara Mohawk Power |
| Siam Cement |
Niagara Mohawk and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niagara Mohawk and Siam Cement
The main advantage of trading using opposite Niagara Mohawk and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niagara Mohawk 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.| Niagara Mohawk vs. Legacy Education | Niagara Mohawk vs. Apple Inc | Niagara Mohawk vs. NVIDIA | Niagara Mohawk vs. Microsoft |
| Siam Cement vs. FTAI Infrastructure | Siam Cement vs. RCM Technologies | Siam Cement vs. NN Inc | Siam Cement vs. Tejon Ranch Co |
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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