Correlation Between Siam Cement and Chukai Public
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Chukai Public 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 Chukai Public 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 Chukai Public, you can compare the effects of market volatilities on Siam Cement and Chukai Public 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 Chukai Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Chukai Public.
Diversification Opportunities for Siam Cement and Chukai Public
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siam and Chukai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Chukai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chukai 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 Chukai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chukai Public has no effect on the direction of Siam Cement i.e., Siam Cement and Chukai Public go up and down completely randomly.
Pair Corralation between Siam Cement and Chukai Public
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Chukai Public. But the stock apears to be less risky and, when comparing its historical volatility, The Siam Cement is 22.24 times less risky than Chukai Public. The stock trades about -0.06 of its potential returns per unit of risk. The Chukai Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Chukai Public on November 5, 2024 and sell it today you would lose (108.00) from holding Chukai Public or give up 67.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Siam Cement vs. Chukai Public
Performance |
| Timeline |
| Siam Cement |
| Chukai Public |
Siam Cement and Chukai Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Chukai Public
The main advantage of trading using opposite Siam Cement and Chukai Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Chukai Public 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 Chukai Public will offset losses from the drop in Chukai Public'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 |
| Chukai Public vs. Christiani Nielsen Public | Chukai Public vs. Castle Peak Holdings | Chukai Public vs. Capital Engineering Network | Chukai Public vs. CH Karnchang 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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