Correlation Between TRAINLINE PLC and Siamgas

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

By analyzing existing cross correlation between TRAINLINE PLC LS and Siamgas And Petrochemicals, you can compare the effects of market volatilities on TRAINLINE PLC and Siamgas 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 TRAINLINE PLC with a short position of Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Siamgas.

Diversification Opportunities for TRAINLINE PLC and Siamgas

-0.39

Correlation Coefficient

TRAINLINE PLC  Siamgas

Very good diversification

The 3 months correlation between TRAINLINE and Siamgas is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and Siamgas go up and down completely randomly.

Pair Corralation between TRAINLINE PLC and Siamgas

Assuming the 90 days trading horizon TRAINLINE PLC is expected to generate 1.53 times less return on investment than Siamgas. But when comparing it to its historical volatility, TRAINLINE PLC LS is 2.64 times less risky than Siamgas. It trades about 0.06 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Siamgas And Petrochemicals on October 7, 2024 and sell it today you would earn a total of  1.00  from holding Siamgas And Petrochemicals or generate 5.88% return on investment over 90 days.

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

TRAINLINE PLC LS  vs.  Siamgas And Petrochemicals

TRAINLINE PLC LS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRAINLINE PLC LS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, TRAINLINE PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Siamgas And Petroche

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Siamgas is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TRAINLINE PLC and Siamgas

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

The idea behind TRAINLINE PLC LS and Siamgas And Petrochemicals 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.