Correlation Between Chamni Eye and Siam Global

Can any of the company-specific risk be diversified away by investing in both Chamni Eye and Siam Global 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 Chamni Eye and Siam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chamni Eye PCL and Siam Global House, you can compare the effects of market volatilities on Chamni Eye and Siam Global 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 Chamni Eye with a short position of Siam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chamni Eye and Siam Global.

Diversification Opportunities for Chamni Eye and Siam Global

0.62

Correlation Coefficient

Chamni Eye  Siam Global

Poor diversification

The 3 months correlation between Chamni and Siam is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chamni Eye PCL and Siam Global House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Global House and Chamni Eye 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 Chamni Eye PCL are associated (or correlated) with Siam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Global House has no effect on the direction of Chamni Eye i.e., Chamni Eye and Siam Global go up and down completely randomly.

Pair Corralation between Chamni Eye and Siam Global

Assuming the 90 days trading horizon Chamni Eye PCL is expected to under-perform the Siam Global. But the stock apears to be less risky and, when comparing its historical volatility, Chamni Eye PCL is 1.13 times less risky than Siam Global. The stock trades about -0.33 of its potential returns per unit of risk. The Siam Global House is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,590  in Siam Global House on September 30, 2024 and sell it today you would lose (180.00) from holding Siam Global House or give up 11.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Chamni Eye PCL  vs.  Siam Global House

Chamni Eye PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chamni Eye PCL 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 forward-looking signals 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.

Siam Global House

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Global House has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Chamni Eye and Siam Global

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

The idea behind Chamni Eye PCL and Siam Global House 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.