Correlation Between SOFTBANK CORP and Siamgas

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

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

Diversification Opportunities for SOFTBANK CORP and Siamgas

0.35

Correlation Coefficient

SOFTBANK CORP  Siamgas

Weak diversification

The 3 months correlation between SOFTBANK and Siamgas is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SOFTBANK P ADR 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 SOFTBANK CORP 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 SOFTBANK P ADR 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 SOFTBANK CORP i.e., SOFTBANK CORP and Siamgas go up and down completely randomly.

Pair Corralation between SOFTBANK CORP and Siamgas

Assuming the 90 days trading horizon SOFTBANK CORP is expected to generate 1.15 times less return on investment than Siamgas. In addition to that, SOFTBANK CORP is 1.14 times more volatile than Siamgas And Petrochemicals. It trades about 0.07 of its total potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.09 per unit of volatility. If you would invest  18.00  in Siamgas And Petrochemicals on December 2, 2024 and sell it today you would earn a total of  3.00  from holding Siamgas And Petrochemicals or generate 16.67% return on investment over 90 days.

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

SOFTBANK P ADR  vs.  Siamgas And Petrochemicals

SOFTBANK P ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SOFTBANK P ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, SOFTBANK CORP reported solid returns over the last few months and may actually be approaching a breakup point.

Siamgas And Petroche

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Siamgas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOFTBANK CORP and Siamgas

The main advantage of trading using opposite SOFTBANK CORP and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTBANK CORP 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 SOFTBANK P ADR 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.