Correlation Between Minor International and Siam Wellness

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

By analyzing existing cross correlation between Minor International Public and Siam Wellness Group, you can compare the effects of market volatilities on Minor International and Siam Wellness 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 Minor International with a short position of Siam Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and Siam Wellness.

Diversification Opportunities for Minor International and Siam Wellness

-0.03

Correlation Coefficient

Minor International  Siam Wellness

Good diversification

The 3 months correlation between Minor and Siam is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and Siam Wellness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Wellness Group and Minor International 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 Minor International Public are associated (or correlated) with Siam Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Wellness Group has no effect on the direction of Minor International i.e., Minor International and Siam Wellness go up and down completely randomly.

Pair Corralation between Minor International and Siam Wellness

Assuming the 90 days trading horizon Minor International Public is expected to under-perform the Siam Wellness. But the stock apears to be less risky and, when comparing its historical volatility, Minor International Public is 1.56 times less risky than Siam Wellness. The stock trades about -0.02 of its potential returns per unit of risk. The Siam Wellness Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  645.00  in Siam Wellness Group on September 11, 2024 and sell it today you would earn a total of  60.00  from holding Siam Wellness Group or generate 9.3% return on investment over 90 days.

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

Minor International Public  vs.  Siam Wellness Group

Minor International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Siam Wellness Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siam Wellness Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Siam Wellness may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Minor International and Siam Wellness

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

The idea behind Minor International Public and Siam Wellness Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.