Correlation Between RPCG Public and Siam City

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

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

Diversification Opportunities for RPCG Public and Siam City

-0.17

Correlation Coefficient

RPCG Public  Siam City

Good diversification

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

Pair Corralation between RPCG Public and Siam City

Assuming the 90 days trading horizon RPCG Public is expected to under-perform the Siam City. In addition to that, RPCG Public is 1.55 times more volatile than Siam City Cement. It trades about -0.13 of its total potential returns per unit of risk. Siam City Cement is currently generating about 0.03 per unit of volatility. If you would invest  15,900  in Siam City Cement on September 16, 2024 and sell it today you would earn a total of  350.00  from holding Siam City Cement or generate 2.2% return on investment over 90 days.

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

RPCG Public  vs.  Siam City Cement

RPCG Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RPCG Public 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 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.

Siam City Cement

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siam City Cement are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Siam City is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with RPCG Public and Siam City

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

The idea behind RPCG Public and Siam City Cement 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.