Correlation Between Siam Cement and Kiatnakin Phatra

Can any of the company-specific risk be diversified away by investing in both Siam Cement and Kiatnakin Phatra 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 Kiatnakin Phatra 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 Kiatnakin Phatra Bank, you can compare the effects of market volatilities on Siam Cement and Kiatnakin Phatra 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 Kiatnakin Phatra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Kiatnakin Phatra.

Diversification Opportunities for Siam Cement and Kiatnakin Phatra

-0.17

Correlation Coefficient

Siam Cement  Kiatnakin Phatra

Good diversification

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

Pair Corralation between Siam Cement and Kiatnakin Phatra

Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Kiatnakin Phatra. In addition to that, Siam Cement is 1.18 times more volatile than Kiatnakin Phatra Bank. It trades about -0.29 of its total potential returns per unit of risk. Kiatnakin Phatra Bank is currently generating about 0.0 per unit of volatility. If you would invest  5,050  in Kiatnakin Phatra Bank on September 26, 2024 and sell it today you would lose (25.00) from holding Kiatnakin Phatra Bank or give up 0.5% of portfolio value over 90 days.

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

The Siam Cement  vs.  Kiatnakin Phatra Bank

Siam Cement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Siam Cement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Kiatnakin Phatra Bank

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Siam Cement and Kiatnakin Phatra

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

The idea behind The Siam Cement and Kiatnakin Phatra Bank 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.