Correlation Between Siam City and Sikarin Public

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

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

Diversification Opportunities for Siam City and Sikarin Public

-0.23

Correlation Coefficient

Siam City  Sikarin Public

Very good diversification

The 3 months correlation between Siam and Sikarin is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Siam City Cement and Sikarin Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sikarin Public and Siam City 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 Siam City Cement are associated (or correlated) with Sikarin Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sikarin Public has no effect on the direction of Siam City i.e., Siam City and Sikarin Public go up and down completely randomly.

Pair Corralation between Siam City and Sikarin Public

Assuming the 90 days trading horizon Siam City Cement is expected to generate 2.1 times more return on investment than Sikarin Public. However, Siam City is 2.1 times more volatile than Sikarin Public. It trades about 0.03 of its potential returns per unit of risk. Sikarin Public is currently generating about 0.03 per unit of risk. 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

Siam City Cement  vs.  Sikarin Public

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.

Sikarin Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sikarin Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Sikarin Public 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 Siam City and Sikarin Public

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

The idea behind Siam City Cement and Sikarin 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.