Correlation Between Sherwood Public and Siam Commercial
Can any of the company-specific risk be diversified away by investing in both Sherwood Public and Siam Commercial 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 Sherwood Public and Siam Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherwood Public and The Siam Commercial, you can compare the effects of market volatilities on Sherwood Public and Siam Commercial 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 Sherwood Public with a short position of Siam Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherwood Public and Siam Commercial.
Diversification Opportunities for Sherwood Public and Siam Commercial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sherwood and Siam is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sherwood Public and The Siam Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Commercial and Sherwood Public 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 Sherwood Public are associated (or correlated) with Siam Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Commercial has no effect on the direction of Sherwood Public i.e., Sherwood Public and Siam Commercial go up and down completely randomly.
Pair Corralation between Sherwood Public and Siam Commercial
Assuming the 90 days trading horizon Sherwood Public is expected to under-perform the Siam Commercial. In addition to that, Sherwood Public is 1.65 times more volatile than The Siam Commercial. It trades about -0.21 of its total potential returns per unit of risk. The Siam Commercial is currently generating about 0.23 per unit of volatility. If you would invest 10,945 in The Siam Commercial on September 4, 2024 and sell it today you would earn a total of 605.00 from holding The Siam Commercial or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sherwood Public vs. The Siam Commercial
Performance |
| Timeline |
| Sherwood Public |
| Siam Commercial |
Sherwood Public and Siam Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherwood Public and Siam Commercial
The main advantage of trading using opposite Sherwood Public and Siam Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherwood Public position performs unexpectedly, Siam Commercial 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 Commercial will offset losses from the drop in Siam Commercial's long position.| Sherwood Public vs. PTT Public | Sherwood Public vs. The Siam Commercial | Sherwood Public vs. Airports of Thailand | Sherwood Public vs. CP ALL Public |
| Siam Commercial vs. The Siam Cement | Siam Commercial vs. Krung Thai Bank | Siam Commercial vs. Airports of Thailand | Siam Commercial vs. Kasikornbank 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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