Correlation Between Siamgas and Central Retail
Can any of the company-specific risk be diversified away by investing in both Siamgas and Central Retail 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 Siamgas and Central Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siamgas and Petrochemicals and Central Retail, you can compare the effects of market volatilities on Siamgas and Central Retail 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 Siamgas with a short position of Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and Central Retail.
Diversification Opportunities for Siamgas and Central Retail
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siamgas and Central is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas and Petrochemicals and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail and Siamgas 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 Siamgas and Petrochemicals are associated (or correlated) with Central Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of Siamgas i.e., Siamgas and Central Retail go up and down completely randomly.
Pair Corralation between Siamgas and Central Retail
Assuming the 90 days trading horizon Siamgas and Petrochemicals is expected to under-perform the Central Retail. But the stock apears to be less risky and, when comparing its historical volatility, Siamgas and Petrochemicals is 2.04 times less risky than Central Retail. The stock trades about -0.24 of its potential returns per unit of risk. The Central Retail is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,275 in Central Retail on September 15, 2024 and sell it today you would earn a total of 75.00 from holding Central Retail or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siamgas and Petrochemicals vs. Central Retail
Performance |
| Timeline |
| Siamgas and Petroche |
| Central Retail |
Siamgas and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and Central Retail
The main advantage of trading using opposite Siamgas and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, Central Retail 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 Central Retail will offset losses from the drop in Central Retail's long position.| Siamgas vs. Bangchak Public | Siamgas vs. IRPC Public | Siamgas vs. PTT Exploration and | Siamgas vs. PTG Energy PCL |
| Central Retail vs. CPR Gomu Industrial | Central Retail vs. Chow Steel Industries | Central Retail vs. Turnkey Communication Services | Central Retail vs. Symphony Communication 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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