Correlation Between Siam Cement and Siam City
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Siam City 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 Siam City 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 Siam City Cement, you can compare the effects of market volatilities on Siam Cement and Siam City 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 Siam City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Siam City.
Diversification Opportunities for Siam Cement and Siam City
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siam and Siam is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Siam City Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam City Cement 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 Siam City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam City Cement has no effect on the direction of Siam Cement i.e., Siam Cement and Siam City go up and down completely randomly.
Pair Corralation between Siam Cement and Siam City
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Siam City. But the stock apears to be less risky and, when comparing its historical volatility, The Siam Cement is 32.66 times less risky than Siam City. The stock trades about -0.05 of its potential returns per unit of risk. The Siam City Cement is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,650 in Siam City Cement on September 4, 2024 and sell it today you would earn a total of 1,550 from holding Siam City Cement or generate 10.58% 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. Siam City Cement
Performance |
| Timeline |
| Siam Cement |
| Siam City Cement |
Siam Cement and Siam City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Siam City
The main advantage of trading using opposite Siam Cement and Siam City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Siam City 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 Siam City will offset losses from the drop in Siam City'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 |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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