Correlation Between Siam Technic and AddTech Hub

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

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

Diversification Opportunities for Siam Technic and AddTech Hub

0.72

Correlation Coefficient

Siam Technic  AddTech Hub

Poor diversification

The 3 months correlation between Siam and AddTech is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Siam Technic Concrete and AddTech Hub Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddTech Hub Public and Siam Technic 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 Technic Concrete are associated (or correlated) with AddTech Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddTech Hub Public has no effect on the direction of Siam Technic i.e., Siam Technic and AddTech Hub go up and down completely randomly.

Pair Corralation between Siam Technic and AddTech Hub

Assuming the 90 days trading horizon Siam Technic Concrete is expected to under-perform the AddTech Hub. In addition to that, Siam Technic is 1.42 times more volatile than AddTech Hub Public. It trades about -0.14 of its total potential returns per unit of risk. AddTech Hub Public is currently generating about 0.01 per unit of volatility. If you would invest  475.00  in AddTech Hub Public on September 13, 2024 and sell it today you would earn a total of  3.00  from holding AddTech Hub Public or generate 0.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Siam Technic Concrete  vs.  AddTech Hub Public

Siam Technic Concrete

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Technic Concrete has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AddTech Hub Public

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AddTech Hub Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, AddTech Hub 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 Technic and AddTech Hub

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

The idea behind Siam Technic Concrete and AddTech Hub 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.