Correlation Between SiamEast Solutions and Shrinkflex Public

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

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

Diversification Opportunities for SiamEast Solutions and Shrinkflex Public

0.64

Correlation Coefficient

SiamEast Solutions  Shrinkflex Public

Poor diversification

The 3 months correlation between SiamEast and Shrinkflex is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SiamEast Solutions Public and Shrinkflex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shrinkflex Public and SiamEast Solutions 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 SiamEast Solutions Public are associated (or correlated) with Shrinkflex Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shrinkflex Public has no effect on the direction of SiamEast Solutions i.e., SiamEast Solutions and Shrinkflex Public go up and down completely randomly.

Pair Corralation between SiamEast Solutions and Shrinkflex Public

Assuming the 90 days horizon SiamEast Solutions Public is expected to under-perform the Shrinkflex Public. But the stock apears to be less risky and, when comparing its historical volatility, SiamEast Solutions Public is 1.11 times less risky than Shrinkflex Public. The stock trades about -0.22 of its potential returns per unit of risk. The Shrinkflex Public is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  360.00  in Shrinkflex Public on September 14, 2024 and sell it today you would lose (60.00) from holding Shrinkflex Public or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.44%
Values	Daily Returns

SiamEast Solutions Public  vs.  Shrinkflex Public

SiamEast Solutions Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SiamEast Solutions Public 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 drivers 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.

Shrinkflex Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shrinkflex Public 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 basic 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.

Pair Trading with SiamEast Solutions and Shrinkflex Public

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

The idea behind SiamEast Solutions Public and Shrinkflex 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.