Correlation Between Siam Steel and Asia Aviation
Can any of the company-specific risk be diversified away by investing in both Siam Steel and Asia Aviation 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 Steel and Asia Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siam Steel International and Asia Aviation Public, you can compare the effects of market volatilities on Siam Steel and Asia Aviation 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 Steel with a short position of Asia Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Steel and Asia Aviation.
Diversification Opportunities for Siam Steel and Asia Aviation
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siam and Asia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Siam Steel International and Asia Aviation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Aviation Public and Siam Steel 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 Steel International are associated (or correlated) with Asia Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Aviation Public has no effect on the direction of Siam Steel i.e., Siam Steel and Asia Aviation go up and down completely randomly.
Pair Corralation between Siam Steel and Asia Aviation
Assuming the 90 days trading horizon Siam Steel International is expected to under-perform the Asia Aviation. But the stock apears to be less risky and, when comparing its historical volatility, Siam Steel International is 1.12 times less risky than Asia Aviation. The stock trades about -0.19 of its potential returns per unit of risk. The Asia Aviation Public is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 284.00 in Asia Aviation Public on September 12, 2024 and sell it today you would lose (2.00) from holding Asia Aviation Public or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siam Steel International vs. Asia Aviation Public
Performance |
| Timeline |
| Siam Steel International |
| Asia Aviation Public |
Siam Steel and Asia Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Steel and Asia Aviation
The main advantage of trading using opposite Siam Steel and Asia Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Steel position performs unexpectedly, Asia Aviation 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 Asia Aviation will offset losses from the drop in Asia Aviation's long position.| Siam Steel vs. Tata Steel Public | Siam Steel vs. TTCL Public | Siam Steel vs. Thaifoods Group Public | Siam Steel vs. TMT Steel Public |
| Asia Aviation vs. Airports of Thailand | Asia Aviation vs. Bangkok Expressway and | Asia Aviation vs. BTS Group Holdings | Asia Aviation vs. Bangkok Airways 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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