Correlation Between Siam Commercial and Applied DB

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

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

Diversification Opportunities for Siam Commercial and Applied DB

-0.2

Correlation Coefficient

Siam Commercial  Applied DB

Good diversification

The 3 months correlation between Siam and Applied is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Commercial and Applied DB Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied DB Public and Siam Commercial 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 The Siam Commercial are associated (or correlated) with Applied DB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied DB Public has no effect on the direction of Siam Commercial i.e., Siam Commercial and Applied DB go up and down completely randomly.

Pair Corralation between Siam Commercial and Applied DB

Assuming the 90 days trading horizon The Siam Commercial is expected to generate 27.62 times more return on investment than Applied DB. However, Siam Commercial is 27.62 times more volatile than Applied DB Public. It trades about 0.12 of its potential returns per unit of risk. Applied DB Public is currently generating about -0.04 per unit of risk. If you would invest  10,945  in The Siam Commercial on September 26, 2024 and sell it today you would earn a total of  855.00  from holding The Siam Commercial or generate 7.81% return on investment over 90 days.

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

The Siam Commercial  vs.  Applied DB Public

Siam Commercial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Siam Commercial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Siam Commercial sustained solid returns over the last few months and may actually be approaching a breakup point.

Applied DB Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied DB Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Siam Commercial and Applied DB

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

The idea behind The Siam Commercial and Applied DB Public 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.