Correlation Between Siam Cement and Capital Engineering
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Capital Engineering 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 Capital Engineering 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 Capital Engineering Network, you can compare the effects of market volatilities on Siam Cement and Capital Engineering 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 Capital Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Capital Engineering.
Diversification Opportunities for Siam Cement and Capital Engineering
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siam and Capital is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Capital Engineering Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Engineering 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 Capital Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Engineering has no effect on the direction of Siam Cement i.e., Siam Cement and Capital Engineering go up and down completely randomly.
Pair Corralation between Siam Cement and Capital Engineering
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Capital Engineering. In addition to that, Siam Cement is 2.72 times more volatile than Capital Engineering Network. It trades about -0.23 of its total potential returns per unit of risk. Capital Engineering Network is currently generating about -0.11 per unit of volatility. If you would invest 210.00 in Capital Engineering Network on September 12, 2024 and sell it today you would lose (10.00) from holding Capital Engineering Network or give up 4.76% 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. Capital Engineering Network
Performance |
| Timeline |
| Siam Cement |
| Capital Engineering |
Siam Cement and Capital Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Capital Engineering
The main advantage of trading using opposite Siam Cement and Capital Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Capital Engineering 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 Capital Engineering will offset losses from the drop in Capital Engineering's long position.| Siam Cement vs. AAPICO Hitech Public | Siam Cement vs. Siam Technic Concrete | Siam Cement vs. Silicon Craft Technology | Siam Cement vs. Peerapat Technology Public |
| Capital Engineering vs. Thantawan Industry Public | Capital Engineering vs. The Erawan Group | Capital Engineering vs. Jay Mart Public | Capital Engineering vs. Airports of Thailand |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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