Correlation Between Siam City and Southern Concrete
Can any of the company-specific risk be diversified away by investing in both Siam City and Southern Concrete 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 City and Southern Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siam City Cement and Southern Concrete Pile, you can compare the effects of market volatilities on Siam City and Southern Concrete 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 City with a short position of Southern Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam City and Southern Concrete.
Diversification Opportunities for Siam City and Southern Concrete
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siam and Southern is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Siam City Cement and Southern Concrete Pile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Concrete Pile and Siam City 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 Siam City Cement are associated (or correlated) with Southern Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Concrete Pile has no effect on the direction of Siam City i.e., Siam City and Southern Concrete go up and down completely randomly.
Pair Corralation between Siam City and Southern Concrete
Assuming the 90 days trading horizon Siam City is expected to generate 38.07 times less return on investment than Southern Concrete. But when comparing it to its historical volatility, Siam City Cement is 44.34 times less risky than Southern Concrete. It trades about 0.05 of its potential returns per unit of risk. Southern Concrete Pile is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 454.00 in Southern Concrete Pile on August 25, 2024 and sell it today you would earn a total of 236.00 from holding Southern Concrete Pile or generate 51.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Siam City Cement vs. Southern Concrete Pile
Performance |
| Timeline |
| Siam City Cement |
| Southern Concrete Pile |
Siam City and Southern Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam City and Southern Concrete
The main advantage of trading using opposite Siam City and Southern Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam City position performs unexpectedly, Southern Concrete 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 Southern Concrete will offset losses from the drop in Southern Concrete's long position.| Siam City vs. PTT Public | Siam City vs. PTT Exploration and | Siam City vs. The Siam Cement | Siam City 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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