Correlation Between Siam Cement and Nava Nakorn
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Nava Nakorn 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 Nava Nakorn 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 Nava Nakorn Public, you can compare the effects of market volatilities on Siam Cement and Nava Nakorn 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 Nava Nakorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Nava Nakorn.
Diversification Opportunities for Siam Cement and Nava Nakorn
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Siam and Nava is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Nava Nakorn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nava Nakorn 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 Nava Nakorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nava Nakorn Public has no effect on the direction of Siam Cement i.e., Siam Cement and Nava Nakorn go up and down completely randomly.
Pair Corralation between Siam Cement and Nava Nakorn
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Nava Nakorn. In addition to that, Siam Cement is 2.16 times more volatile than Nava Nakorn Public. It trades about -0.15 of its total potential returns per unit of risk. Nava Nakorn Public is currently generating about -0.14 per unit of volatility. If you would invest 171.00 in Nava Nakorn Public on November 2, 2024 and sell it today you would lose (5.00) from holding Nava Nakorn Public or give up 2.92% 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. Nava Nakorn Public
Performance |
| Timeline |
| Siam Cement |
| Nava Nakorn Public |
Siam Cement and Nava Nakorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Cement and Nava Nakorn
The main advantage of trading using opposite Siam Cement and Nava Nakorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Nava Nakorn 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 Nava Nakorn will offset losses from the drop in Nava Nakorn's long position.| Siam Cement vs. Muang Thai Insurance | Siam Cement vs. Silicon Craft Technology | Siam Cement vs. Krung Thai Bank | Siam Cement vs. CPN Retail Growth |
| Nava Nakorn vs. Wave Entertainment Public | Nava Nakorn vs. Vibhavadi Medical Center | Nava Nakorn vs. VGI Public | Nava Nakorn vs. WHA 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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