Correlation Between Siam Global and Business Online

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

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

Diversification Opportunities for Siam Global and Business Online

-0.52

Correlation Coefficient

Siam Global  Business Online

Excellent diversification

The 3 months correlation between Siam and Business is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Siam Global House and Business Online PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Business Online PCL and Siam Global 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 Siam Global House are associated (or correlated) with Business Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Business Online PCL has no effect on the direction of Siam Global i.e., Siam Global and Business Online go up and down completely randomly.

Pair Corralation between Siam Global and Business Online

Assuming the 90 days trading horizon Siam Global House is expected to generate 0.88 times more return on investment than Business Online. However, Siam Global House is 1.13 times less risky than Business Online. It trades about 0.08 of its potential returns per unit of risk. Business Online PCL is currently generating about -0.17 per unit of risk. If you would invest  1,490  in Siam Global House on September 4, 2024 and sell it today you would earn a total of  120.00  from holding Siam Global House or generate 8.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Siam Global House  vs.  Business Online PCL

Siam Global House

Risk-Adjusted Performance

6 of 100

Modest

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

Business Online PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Business Online 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 essential indicators 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 Siam Global and Business Online

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

The idea behind Siam Global House and Business Online PCL 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.