Correlation Between CPU SOFTWAREHOUSE and Siamgas

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

By analyzing existing cross correlation between CPU SOFTWAREHOUSE and Siamgas And Petrochemicals, you can compare the effects of market volatilities on CPU SOFTWAREHOUSE and Siamgas 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 CPU SOFTWAREHOUSE with a short position of Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPU SOFTWAREHOUSE and Siamgas.

Diversification Opportunities for CPU SOFTWAREHOUSE and Siamgas

0.17

Correlation Coefficient

CPU SOFTWAREHOUSE  Siamgas

Average diversification

The 3 months correlation between CPU and Siamgas is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CPU SOFTWAREHOUSE and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of CPU SOFTWAREHOUSE i.e., CPU SOFTWAREHOUSE and Siamgas go up and down completely randomly.

Pair Corralation between CPU SOFTWAREHOUSE and Siamgas

Assuming the 90 days trading horizon CPU SOFTWAREHOUSE is expected to under-perform the Siamgas. In addition to that, CPU SOFTWAREHOUSE is 1.3 times more volatile than Siamgas And Petrochemicals. It trades about -0.02 of its total potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.04 per unit of volatility. If you would invest  16.00  in Siamgas And Petrochemicals on September 18, 2024 and sell it today you would earn a total of  1.00  from holding Siamgas And Petrochemicals or generate 6.25% return on investment over 90 days.

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

CPU SOFTWAREHOUSE  vs.  Siamgas And Petrochemicals

CPU SOFTWAREHOUSE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CPU SOFTWAREHOUSE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CPU SOFTWAREHOUSE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Siamgas And Petroche

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Siamgas may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CPU SOFTWAREHOUSE and Siamgas

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

The idea behind CPU SOFTWAREHOUSE and Siamgas And Petrochemicals 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.