Correlation Between Dexon Technology and Siam Technic

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

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

Diversification Opportunities for Dexon Technology and Siam Technic

0.77

Correlation Coefficient

Dexon Technology  Siam Technic

Poor diversification

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

Pair Corralation between Dexon Technology and Siam Technic

Assuming the 90 days trading horizon Dexon Technology PCL is expected to generate 0.87 times more return on investment than Siam Technic. However, Dexon Technology PCL is 1.15 times less risky than Siam Technic. It trades about -0.12 of its potential returns per unit of risk. Siam Technic Concrete is currently generating about -0.15 per unit of risk. If you would invest  174.00  in Dexon Technology PCL on September 14, 2024 and sell it today you would lose (22.00) from holding Dexon Technology PCL or give up 12.64% of portfolio value over 90 days.

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

Dexon Technology PCL  vs.  Siam Technic Concrete

Dexon Technology PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dexon Technology PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Siam Technic Concrete

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Technic Concrete has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dexon Technology and Siam Technic

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

The idea behind Dexon Technology PCL and Siam Technic Concrete 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..