Correlation Between Siam Cement and Central Pattana
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Central Pattana 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 Central Pattana 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 Central Pattana Public, you can compare the effects of market volatilities on Siam Cement and Central Pattana 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 Central Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Central Pattana.
Diversification Opportunities for Siam Cement and Central Pattana
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siam and Central is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Central Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pattana Public 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 Central Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pattana Public has no effect on the direction of Siam Cement i.e., Siam Cement and Central Pattana go up and down completely randomly.
Pair Corralation between Siam Cement and Central Pattana
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Central Pattana. But the stock apears to be less risky and, when comparing its historical volatility, The Siam Cement is 32.96 times less risky than Central Pattana. The stock trades about -0.05 of its potential returns per unit of risk. The Central Pattana Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,957 in Central Pattana Public on September 1, 2024 and sell it today you would lose (957.00) from holding Central Pattana Public or give up 13.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.77% |
| Values | Daily Returns |
The Siam Cement vs. Central Pattana Public
Performance |
| Timeline |
| Siam Cement |
| Central Pattana Public |
Siam Cement and Central Pattana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Central Pattana
The main advantage of trading using opposite Siam Cement and Central Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Central Pattana 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 Central Pattana will offset losses from the drop in Central Pattana's long position.| Siam Cement vs. PTT Public | Siam Cement vs. The Siam Commercial | Siam Cement vs. Airports of Thailand | Siam Cement vs. CP ALL Public |
| Central Pattana vs. PTG Energy Public | Central Pattana vs. WHA Public | Central Pattana vs. Thai Union Group | Central Pattana vs. Ratch Group Public |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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