Correlation Between Global Power and Siam Global

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

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

Diversification Opportunities for Global Power and Siam Global

0.21

Correlation Coefficient

Global Power  Siam Global

Modest diversification

The 3 months correlation between Global and Siam is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Global Power Synergy 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 Global Power 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 Global Power Synergy 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 Global Power i.e., Global Power and Siam Global go up and down completely randomly.

Pair Corralation between Global Power and Siam Global

Assuming the 90 days trading horizon Global Power Synergy is expected to under-perform the Siam Global. In addition to that, Global Power is 1.12 times more volatile than Siam Global House. It trades about -0.05 of its total potential returns per unit of risk. Siam Global House is currently generating about 0.03 per unit of volatility. If you would invest  1,550  in Siam Global House on September 13, 2024 and sell it today you would earn a total of  40.00  from holding Siam Global House or generate 2.58% return on investment over 90 days.

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

Global Power Synergy  vs.  Siam Global House

Global Power Synergy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Power Synergy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Global Power is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Siam Global House

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siam Global House are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Siam Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Power and Siam Global

The main advantage of trading using opposite Global Power and Siam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Power 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 Global Power Synergy 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.