Correlation Between Siam Commercial and Airports
Can any of the company-specific risk be diversified away by investing in both Siam Commercial and Airports 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 Siam Commercial and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Siam Commercial and Airports of Thailand, you can compare the effects of market volatilities on Siam Commercial and Airports 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 Siam Commercial with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Commercial and Airports.
Diversification Opportunities for Siam Commercial and Airports
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siam and Airports is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Commercial and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and Siam Commercial 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 The Siam Commercial are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Siam Commercial i.e., Siam Commercial and Airports go up and down completely randomly.
Pair Corralation between Siam Commercial and Airports
Assuming the 90 days trading horizon The Siam Commercial is expected to generate 1.0 times more return on investment than Airports. However, The Siam Commercial is 1.0 times less risky than Airports. It trades about 0.06 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.06 per unit of risk. If you would invest 10,399 in The Siam Commercial on August 28, 2024 and sell it today you would earn a total of 1,101 from holding The Siam Commercial or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
The Siam Commercial vs. Airports of Thailand
Performance |
| Timeline |
| Siam Commercial |
| Airports of Thailand |
Siam Commercial and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Commercial and Airports
The main advantage of trading using opposite Siam Commercial and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Commercial position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Siam Commercial vs. PTT Public | Siam Commercial vs. CP ALL Public | Siam Commercial vs. SCB X Public | Siam Commercial vs. Airports of Thailand |
| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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