Correlation Between Siam Steel and PRG Public
Can any of the company-specific risk be diversified away by investing in both Siam Steel and PRG Public 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 PRG Public 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 PRG Public, you can compare the effects of market volatilities on Siam Steel and PRG Public 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 PRG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Steel and PRG Public.
Diversification Opportunities for Siam Steel and PRG Public
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siam and PRG is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Siam Steel International and PRG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRG 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 PRG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRG Public has no effect on the direction of Siam Steel i.e., Siam Steel and PRG Public go up and down completely randomly.
Pair Corralation between Siam Steel and PRG Public
Assuming the 90 days trading horizon Siam Steel is expected to generate 2.01 times less return on investment than PRG Public. But when comparing it to its historical volatility, Siam Steel International is 1.41 times less risky than PRG Public. It trades about 0.04 of its potential returns per unit of risk. PRG Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,101 in PRG Public on September 3, 2024 and sell it today you would lose (206.00) from holding PRG Public or give up 18.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siam Steel International vs. PRG Public
Performance |
| Timeline |
| Siam Steel International |
| PRG Public |
Siam Steel and PRG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Steel and PRG Public
The main advantage of trading using opposite Siam Steel and PRG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Steel position performs unexpectedly, PRG Public 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 PRG Public will offset losses from the drop in PRG Public's long position.| Siam Steel vs. Siam Steel Service | Siam Steel vs. Siri Prime Office | Siam Steel vs. Ocean Glass Public | Siam Steel vs. Rockworth 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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