Correlation Between Siam Cement and Goodyear Public
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Goodyear 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 Goodyear 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 Goodyear Public, you can compare the effects of market volatilities on Siam Cement and Goodyear 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 Goodyear Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Goodyear Public.
Diversification Opportunities for Siam Cement and Goodyear Public
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siam and Goodyear is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Goodyear Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear 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 Goodyear Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Public has no effect on the direction of Siam Cement i.e., Siam Cement and Goodyear Public go up and down completely randomly.
Pair Corralation between Siam Cement and Goodyear Public
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Goodyear Public. In addition to that, Siam Cement is 4.37 times more volatile than Goodyear Public. It trades about -0.21 of its total potential returns per unit of risk. Goodyear Public is currently generating about 0.23 per unit of volatility. If you would invest 15,400 in Goodyear Public on August 24, 2024 and sell it today you would earn a total of 1,550 from holding Goodyear Public or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Siam Cement vs. Goodyear Public
Performance |
| Timeline |
| Siam Cement |
| Goodyear Public |
Siam Cement and Goodyear Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Goodyear Public
The main advantage of trading using opposite Siam Cement and Goodyear Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Goodyear 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 Goodyear Public will offset losses from the drop in Goodyear Public's 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 |
| Goodyear Public vs. SCB X Public | Goodyear Public vs. Kasikornbank Public | Goodyear Public vs. PTT Public | Goodyear Public vs. Kasikornbank 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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