Correlation Between Siam Cement and Airports
Can any of the company-specific risk be diversified away by investing in both Siam Cement 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 Cement 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 Cement and Airports of Thailand, you can compare the effects of market volatilities on Siam Cement 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 Cement with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Airports.
Diversification Opportunities for Siam Cement and Airports
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siam and Airports is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement 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 Cement 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 Cement 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 Cement i.e., Siam Cement and Airports go up and down completely randomly.
Pair Corralation between Siam Cement and Airports
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Airports. But the stock apears to be less risky and, when comparing its historical volatility, The Siam Cement is 34.62 times less risky than Airports. The stock trades about -0.06 of its potential returns per unit of risk. The Airports of Thailand is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,070 in Airports of Thailand on August 24, 2024 and sell it today you would lose (920.00) from holding Airports of Thailand or give up 13.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
The Siam Cement vs. Airports of Thailand
Performance |
| Timeline |
| Siam Cement |
| Airports of Thailand |
Siam Cement and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Airports
The main advantage of trading using opposite Siam Cement and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement 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 Cement vs. Megachem Public | Siam Cement vs. NCL International Logistics | Siam Cement vs. The Erawan Group | Siam Cement 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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