Correlation Between SP Syndicate and Siam Steel
Can any of the company-specific risk be diversified away by investing in both SP Syndicate and Siam Steel 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 SP Syndicate and Siam Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Syndicate Public and Siam Steel Service, you can compare the effects of market volatilities on SP Syndicate and Siam Steel 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 SP Syndicate with a short position of Siam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Syndicate and Siam Steel.
Diversification Opportunities for SP Syndicate and Siam Steel
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SNP and Siam is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SP Syndicate Public and Siam Steel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel Service and SP Syndicate 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 SP Syndicate Public are associated (or correlated) with Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel Service has no effect on the direction of SP Syndicate i.e., SP Syndicate and Siam Steel go up and down completely randomly.
Pair Corralation between SP Syndicate and Siam Steel
Assuming the 90 days trading horizon SP Syndicate Public is expected to under-perform the Siam Steel. But the stock apears to be less risky and, when comparing its historical volatility, SP Syndicate Public is 65.6 times less risky than Siam Steel. The stock trades about -0.17 of its potential returns per unit of risk. The Siam Steel Service is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Siam Steel Service on September 4, 2024 and sell it today you would lose (46.00) from holding Siam Steel Service or give up 17.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Syndicate Public vs. Siam Steel Service
Performance |
| Timeline |
| SP Syndicate Public |
| Siam Steel Service |
SP Syndicate and Siam Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Syndicate and Siam Steel
The main advantage of trading using opposite SP Syndicate and Siam Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Syndicate position performs unexpectedly, Siam Steel 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 Siam Steel will offset losses from the drop in Siam Steel's long position.| SP Syndicate vs. Central Pattana Public | SP Syndicate vs. CP ALL Public | SP Syndicate vs. Bangkok Dusit Medical | SP Syndicate vs. Airports of Thailand |
| Siam Steel vs. Thai Metal Drum | Siam Steel vs. Southern Concrete Pile | Siam Steel vs. STPI Public | Siam Steel vs. Saha Union 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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