Correlation Between Siam Cement and Eastern Technical
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Eastern Technical 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 Eastern Technical 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 Eastern Technical Engineering, you can compare the effects of market volatilities on Siam Cement and Eastern Technical 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 Eastern Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Eastern Technical.
Diversification Opportunities for Siam Cement and Eastern Technical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siam and Eastern is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Eastern Technical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Technical 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 Eastern Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Technical has no effect on the direction of Siam Cement i.e., Siam Cement and Eastern Technical go up and down completely randomly.
Pair Corralation between Siam Cement and Eastern Technical
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Eastern Technical. But the stock apears to be less risky and, when comparing its historical volatility, The Siam Cement is 1.23 times less risky than Eastern Technical. The stock trades about -0.29 of its potential returns per unit of risk. The Eastern Technical Engineering is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Eastern Technical Engineering on September 12, 2024 and sell it today you would lose (7.00) from holding Eastern Technical Engineering or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Siam Cement vs. Eastern Technical Engineering
Performance |
| Timeline |
| Siam Cement |
| Eastern Technical |
Siam Cement and Eastern Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Eastern Technical
The main advantage of trading using opposite Siam Cement and Eastern Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Eastern Technical 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 Eastern Technical will offset losses from the drop in Eastern Technical'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 |
| Eastern Technical vs. G Capital Public | Eastern Technical vs. Fortune Parts Industry | Eastern Technical vs. Hydrotek Public | Eastern Technical vs. Ama Marine 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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