Correlation Between Siam Commercial and WHA Utilities

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Can any of the company-specific risk be diversified away by investing in both Siam Commercial and WHA Utilities 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 WHA Utilities 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 WHA Utilities and, you can compare the effects of market volatilities on Siam Commercial and WHA Utilities 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 WHA Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Commercial and WHA Utilities.

Diversification Opportunities for Siam Commercial and WHA Utilities

-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Siam and WHA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Commercial and WHA Utilities and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Utilities 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 WHA Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Utilities has no effect on the direction of Siam Commercial i.e., Siam Commercial and WHA Utilities go up and down completely randomly.

Pair Corralation between Siam Commercial and WHA Utilities

Assuming the 90 days trading horizon The Siam Commercial is expected to generate 0.86 times more return on investment than WHA Utilities. However, The Siam Commercial is 1.17 times less risky than WHA Utilities. It trades about 0.22 of its potential returns per unit of risk. WHA Utilities and is currently generating about 0.1 per unit of risk. If you would invest  10,945  in The Siam Commercial on September 19, 2024 and sell it today you would earn a total of  655.00  from holding The Siam Commercial or generate 5.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

The Siam Commercial  vs.  WHA Utilities and

 Performance 
       Timeline  
Siam Commercial 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Siam Commercial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Siam Commercial sustained solid returns over the last few months and may actually be approaching a breakup point.
WHA Utilities 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in WHA Utilities and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, WHA Utilities may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Siam Commercial and WHA Utilities Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Siam Commercial and WHA Utilities

The main advantage of trading using opposite Siam Commercial and WHA Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Commercial position performs unexpectedly, WHA Utilities 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 WHA Utilities will offset losses from the drop in WHA Utilities' long position.
The idea behind The Siam Commercial and WHA Utilities and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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