Correlation Between Siam Cement and Ananda Development
Can any of the company-specific risk be diversified away by investing in both Siam Cement and Ananda Development 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 Cement and Ananda Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Siam Cement and Ananda Development Public, you can compare the effects of market volatilities on Siam Cement and Ananda Development 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 Cement with a short position of Ananda Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Ananda Development.
Diversification Opportunities for Siam Cement and Ananda Development
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Siam and Ananda is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Ananda Development Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ananda Development Public and Siam Cement 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 Cement are associated (or correlated) with Ananda Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ananda Development Public has no effect on the direction of Siam Cement i.e., Siam Cement and Ananda Development go up and down completely randomly.
Pair Corralation between Siam Cement and Ananda Development
Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Ananda Development. But the stock apears to be less risky and, when comparing its historical volatility, The Siam Cement is 1.07 times less risky than Ananda Development. The stock trades about -0.29 of its potential returns per unit of risk. The Ananda Development Public is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Ananda Development Public on September 26, 2024 and sell it today you would lose (21.00) from holding Ananda Development Public or give up 26.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
The Siam Cement vs. Ananda Development Public
Performance |
Timeline |
Siam Cement |
Ananda Development Public |
Siam Cement and Ananda Development Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Siam Cement and Ananda Development
The main advantage of trading using opposite Siam Cement and Ananda Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, Ananda Development 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 Ananda Development will offset losses from the drop in Ananda Development's long position.Siam Cement vs. Krung Thai Bank | Siam Cement vs. TISCO Financial Group | Siam Cement vs. LH Financial Group | Siam Cement vs. 3BB INTERNET INFRASTRUCTURE |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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