Correlation Between Siam Steel and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Siam Steel and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siam Steel Service and Dow Jones Industrial, you can compare the effects of market volatilities on Siam Steel and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Steel and Dow Jones.
Diversification Opportunities for Siam Steel and Dow Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Siam and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Siam Steel Service and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Service are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Siam Steel i.e., Siam Steel and Dow Jones go up and down completely randomly.
Pair Corralation between Siam Steel and Dow Jones
Assuming the 90 days trading horizon Siam Steel Service is expected to generate 63.19 times more return on investment than Dow Jones. However, Siam Steel is 63.19 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 257.00 in Siam Steel Service on August 24, 2024 and sell it today you would lose (35.00) from holding Siam Steel Service or give up 13.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.98% |
| Values | Daily Returns |
Siam Steel Service vs. Dow Jones Industrial
Performance |
| Timeline |
Siam Steel and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Siam Steel Service
Pair trading matchups for Siam Steel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Siam Steel and Dow Jones
The main advantage of trading using opposite Siam Steel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Steel position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Siam Steel vs. Thai Metal Drum | Siam Steel vs. Southern Concrete Pile | Siam Steel vs. STPI Public | Siam Steel vs. Saha Union Public |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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