Correlation Between Siamgas and GAMESTOP

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

Diversification Opportunities for Siamgas and GAMESTOP

-0.28

Correlation Coefficient

Siamgas  GAMESTOP

Very good diversification

The 3 months correlation between Siamgas and GAMESTOP is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Siamgas i.e., Siamgas and GAMESTOP go up and down completely randomly.

Pair Corralation between Siamgas and GAMESTOP

Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 2.07 times more return on investment than GAMESTOP. However, Siamgas is 2.07 times more volatile than GAMESTOP. It trades about 0.06 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.09 per unit of risk. If you would invest  14.00  in Siamgas And Petrochemicals on September 29, 2024 and sell it today you would earn a total of  4.00  from holding Siamgas And Petrochemicals or generate 28.57% return on investment over 90 days.

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

Siamgas And Petrochemicals  vs.  GAMESTOP

Siamgas And Petroche

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siamgas And Petrochemicals has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

GAMESTOP

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GAMESTOP are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GAMESTOP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siamgas and GAMESTOP

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

The idea behind Siamgas And Petrochemicals and GAMESTOP 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.