Correlation Between Alla Public and SiamEast Solutions

Can any of the company-specific risk be diversified away by investing in both Alla Public and SiamEast Solutions 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 Alla Public and SiamEast Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alla Public and SiamEast Solutions Public, you can compare the effects of market volatilities on Alla Public and SiamEast Solutions 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 Alla Public with a short position of SiamEast Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alla Public and SiamEast Solutions.

Diversification Opportunities for Alla Public and SiamEast Solutions

0.77

Correlation Coefficient

Alla Public  SiamEast Solutions

Poor diversification

The 3 months correlation between Alla and SiamEast is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alla Public and SiamEast Solutions Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiamEast Solutions Public and Alla 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 Alla Public are associated (or correlated) with SiamEast Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiamEast Solutions Public has no effect on the direction of Alla Public i.e., Alla Public and SiamEast Solutions go up and down completely randomly.

Pair Corralation between Alla Public and SiamEast Solutions

Assuming the 90 days trading horizon Alla Public is expected to generate 1.14 times more return on investment than SiamEast Solutions. However, Alla Public is 1.14 times more volatile than SiamEast Solutions Public. It trades about 0.08 of its potential returns per unit of risk. SiamEast Solutions Public is currently generating about -0.23 per unit of risk. If you would invest  154.00  in Alla Public on September 4, 2024 and sell it today you would earn a total of  15.00  from holding Alla Public or generate 9.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Alla Public  vs.  SiamEast Solutions Public

Alla Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alla Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Alla Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SiamEast Solutions Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SiamEast Solutions Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alla Public and SiamEast Solutions

The main advantage of trading using opposite Alla Public and SiamEast Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alla Public position performs unexpectedly, SiamEast Solutions 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 SiamEast Solutions will offset losses from the drop in SiamEast Solutions' long position.

The idea behind Alla Public and SiamEast Solutions Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.