Correlation Between Siamgas and President Bakery
Can any of the company-specific risk be diversified away by investing in both Siamgas and President Bakery 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 President Bakery 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 President Bakery Public, you can compare the effects of market volatilities on Siamgas and President Bakery 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 President Bakery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and President Bakery.
Diversification Opportunities for Siamgas and President Bakery
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siamgas and President is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas and Petrochemicals and President Bakery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Bakery Public 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 President Bakery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Bakery Public has no effect on the direction of Siamgas i.e., Siamgas and President Bakery go up and down completely randomly.
Pair Corralation between Siamgas and President Bakery
Assuming the 90 days trading horizon Siamgas is expected to generate 13.09 times less return on investment than President Bakery. But when comparing it to its historical volatility, Siamgas and Petrochemicals is 1.01 times less risky than President Bakery. It trades about 0.0 of its potential returns per unit of risk. President Bakery Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,950 in President Bakery Public on October 20, 2024 and sell it today you would earn a total of 50.00 from holding President Bakery Public or generate 0.84% 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. President Bakery Public
Performance |
| Timeline |
| Siamgas and Petroche |
| President Bakery Public |
Siamgas and President Bakery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and President Bakery
The main advantage of trading using opposite Siamgas and President Bakery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas position performs unexpectedly, President Bakery 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 President Bakery will offset losses from the drop in President Bakery's long position.| Siamgas vs. Bangchak Public | Siamgas vs. IRPC Public | Siamgas vs. PTT Exploration and | Siamgas vs. Star Petroleum Refining |
| President Bakery vs. MK Restaurant Group | President Bakery vs. Haad Thip Public | President Bakery vs. Thai President Foods | President Bakery vs. Minor International 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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