Correlation Between Siam Commercial and Birla Carbon
Can any of the company-specific risk be diversified away by investing in both Siam Commercial and Birla Carbon 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 Birla Carbon 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 Birla Carbon Public, you can compare the effects of market volatilities on Siam Commercial and Birla Carbon 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 Birla Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Commercial and Birla Carbon.
Diversification Opportunities for Siam Commercial and Birla Carbon
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siam and Birla is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Commercial and Birla Carbon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birla Carbon Public 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 Birla Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birla Carbon Public has no effect on the direction of Siam Commercial i.e., Siam Commercial and Birla Carbon go up and down completely randomly.
Pair Corralation between Siam Commercial and Birla Carbon
Assuming the 90 days trading horizon The Siam Commercial is expected to generate 0.55 times more return on investment than Birla Carbon. However, The Siam Commercial is 1.82 times less risky than Birla Carbon. It trades about 0.21 of its potential returns per unit of risk. Birla Carbon Public is currently generating about -0.21 per unit of risk. If you would invest 10,945 in The Siam Commercial on August 29, 2024 and sell it today you would earn a total of 543.00 from holding The Siam Commercial or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Siam Commercial vs. Birla Carbon Public
Performance |
| Timeline |
| Siam Commercial |
| Birla Carbon Public |
Siam Commercial and Birla Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Commercial and Birla Carbon
The main advantage of trading using opposite Siam Commercial and Birla Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Commercial position performs unexpectedly, Birla Carbon 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 Birla Carbon will offset losses from the drop in Birla Carbon's 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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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