Correlation Between Siam Technic and Sun Vending

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

Diversification Opportunities for Siam Technic and Sun Vending

0.83

Correlation Coefficient

Siam Technic  Sun Vending

Very poor diversification

The 3 months correlation between Siam and Sun is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Siam Technic Concrete and Sun Vending Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Vending Technology 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 Sun Vending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Vending Technology has no effect on the direction of Siam Technic i.e., Siam Technic and Sun Vending go up and down completely randomly.

Pair Corralation between Siam Technic and Sun Vending

Assuming the 90 days trading horizon Siam Technic Concrete is expected to generate 2.13 times more return on investment than Sun Vending. However, Siam Technic is 2.13 times more volatile than Sun Vending Technology. It trades about 0.25 of its potential returns per unit of risk. Sun Vending Technology is currently generating about -0.31 per unit of risk. If you would invest  100.00  in Siam Technic Concrete on September 15, 2024 and sell it today you would earn a total of  11.00  from holding Siam Technic Concrete or generate 11.0% return on investment over 90 days.

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

Siam Technic Concrete  vs.  Sun Vending Technology

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.

Sun Vending Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Vending Technology 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 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 Siam Technic and Sun Vending

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

The idea behind Siam Technic Concrete and Sun Vending Technology 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.