Correlation Between Siamgas and Packagingof America

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

Diversification Opportunities for Siamgas and Packagingof America

-0.37

Correlation Coefficient

Siamgas  Packagingof America

Very good diversification

The 3 months correlation between Siamgas and Packagingof is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packagingof America 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 Packagingof America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packagingof America has no effect on the direction of Siamgas i.e., Siamgas and Packagingof America go up and down completely randomly.

Pair Corralation between Siamgas and Packagingof America

Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 5.05 times more return on investment than Packagingof America. However, Siamgas is 5.05 times more volatile than Packaging of. It trades about 0.04 of its potential returns per unit of risk. Packaging of is currently generating about 0.1 per unit of risk. If you would invest  11.00  in Siamgas And Petrochemicals on October 11, 2024 and sell it today you would earn a total of  7.00  from holding Siamgas And Petrochemicals or generate 63.64% 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.  Packaging of

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Packagingof America

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Packaging of are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Packagingof America reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siamgas and Packagingof America

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

The idea behind Siamgas And Petrochemicals and Packaging of 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..