Correlation Between Siam Steel and Thai Stanley
Can any of the company-specific risk be diversified away by investing in both Siam Steel and Thai Stanley 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 Thai Stanley 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 Thai Stanley Electric, you can compare the effects of market volatilities on Siam Steel and Thai Stanley 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 Thai Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Steel and Thai Stanley.
Diversification Opportunities for Siam Steel and Thai Stanley
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siam and Thai is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Siam Steel Service and Thai Stanley Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Stanley Electric 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 Thai Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Stanley Electric has no effect on the direction of Siam Steel i.e., Siam Steel and Thai Stanley go up and down completely randomly.
Pair Corralation between Siam Steel and Thai Stanley
Assuming the 90 days trading horizon Siam Steel Service is expected to generate 42.89 times more return on investment than Thai Stanley. However, Siam Steel is 42.89 times more volatile than Thai Stanley Electric. It trades about 0.06 of its potential returns per unit of risk. Thai Stanley Electric is currently generating about 0.08 per unit of risk. 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 |
Siam Steel Service vs. Thai Stanley Electric
Performance |
| Timeline |
| Siam Steel Service |
| Thai Stanley Electric |
Siam Steel and Thai Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siam Steel and Thai Stanley
The main advantage of trading using opposite Siam Steel and Thai Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Steel position performs unexpectedly, Thai Stanley 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 Thai Stanley will offset losses from the drop in Thai Stanley's 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 |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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