Correlation Between Siamgas and Lundin Energy

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

Diversification Opportunities for Siamgas and Lundin Energy

0.11

Correlation Coefficient

Siamgas  Lundin Energy

Average diversification

The 3 months correlation between Siamgas and Lundin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB 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 Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of Siamgas i.e., Siamgas and Lundin Energy go up and down completely randomly.

Pair Corralation between Siamgas and Lundin Energy

Assuming the 90 days trading horizon Siamgas is expected to generate 16.88 times less return on investment than Lundin Energy. But when comparing it to its historical volatility, Siamgas And Petrochemicals is 1.07 times less risky than Lundin Energy. It trades about 0.01 of its potential returns per unit of risk. Lundin Energy AB is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  53.00  in Lundin Energy AB on September 15, 2024 and sell it today you would earn a total of  6.00  from holding Lundin Energy AB or generate 11.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Siamgas And Petrochemicals  vs.  Lundin Energy AB

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.

Lundin Energy AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lundin Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Siamgas and Lundin Energy

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

The idea behind Siamgas And Petrochemicals and Lundin Energy AB 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.