Correlation Between Siamgas and INTER CARS

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

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

Diversification Opportunities for Siamgas and INTER CARS

0.24

Correlation Coefficient

Siamgas  INTER CARS

Modest diversification

The 3 months correlation between Siamgas and INTER is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA and Siamgas 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 Siamgas And Petrochemicals are associated (or correlated) with INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of Siamgas i.e., Siamgas and INTER CARS go up and down completely randomly.

Pair Corralation between Siamgas and INTER CARS

Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 3.8 times more return on investment than INTER CARS. However, Siamgas is 3.8 times more volatile than INTER CARS SA. It trades about 0.03 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.04 per unit of risk. If you would invest  17.00  in Siamgas And Petrochemicals on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Siamgas And Petrochemicals or generate 0.0% return on investment over 90 days.

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

Siamgas And Petrochemicals  vs.  INTER CARS SA

Siamgas And Petroche

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 2 (%) 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.

INTER CARS SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, INTER CARS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Siamgas and INTER CARS

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

The idea behind Siamgas And Petrochemicals and INTER CARS SA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..