Correlation Between Sri Trang and Siam Cement
Can any of the company-specific risk be diversified away by investing in both Sri Trang and Siam Cement 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 Sri Trang and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sri Trang Gloves and The Siam Cement, you can compare the effects of market volatilities on Sri Trang and Siam Cement 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 Sri Trang with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Trang and Siam Cement.
Diversification Opportunities for Sri Trang and Siam Cement
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sri and Siam is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Gloves and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Sri Trang 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 Sri Trang Gloves are associated (or correlated) with Siam Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Cement has no effect on the direction of Sri Trang i.e., Sri Trang and Siam Cement go up and down completely randomly.
Pair Corralation between Sri Trang and Siam Cement
Assuming the 90 days trading horizon Sri Trang Gloves is expected to under-perform the Siam Cement. In addition to that, Sri Trang is 1.55 times more volatile than The Siam Cement. It trades about -0.13 of its total potential returns per unit of risk. The Siam Cement is currently generating about -0.14 per unit of volatility. If you would invest 20,400 in The Siam Cement on August 28, 2024 and sell it today you would lose (1,100) from holding The Siam Cement or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sri Trang Gloves vs. The Siam Cement
Performance |
| Timeline |
| Sri Trang Gloves |
| Siam Cement |
Sri Trang and Siam Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sri Trang and Siam Cement
The main advantage of trading using opposite Sri Trang and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Trang position performs unexpectedly, Siam Cement 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 Cement will offset losses from the drop in Siam Cement's long position.| Sri Trang vs. NCL International Logistics | Sri Trang vs. The Erawan Group | Sri Trang vs. Airports of Thailand | Sri Trang vs. Eastern Technical Engineering |
| Siam Cement vs. 3BB INTERNET INFRASTRUCTURE | Siam Cement vs. ALL ENERGY UTILITIES | Siam Cement vs. CHUWIT FARM PUBLIC | Siam Cement vs. Lotus Retail Growth |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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