Correlation Between Forth Public and Siam Cement

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Can any of the company-specific risk be diversified away by investing in both Forth Public and Siam Cement 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 Forth Public and Siam Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forth Public and The Siam Cement, you can compare the effects of market volatilities on Forth Public and Siam Cement 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 Forth Public with a short position of Siam Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forth Public and Siam Cement.

Diversification Opportunities for Forth Public and Siam Cement

ForthSiamDiversified AwayForthSiamDiversified Away100%
0.82
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Forth and Siam is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Forth Public and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Forth Public 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 Forth Public are associated (or correlated) with Siam Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Cement has no effect on the direction of Forth Public i.e., Forth Public and Siam Cement go up and down completely randomly.

Pair Corralation between Forth Public and Siam Cement

Assuming the 90 days trading horizon Forth Public is expected to generate 1.46 times more return on investment than Siam Cement. However, Forth Public is 1.46 times more volatile than The Siam Cement. It trades about -0.1 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.2 per unit of risk. If you would invest  1,400  in Forth Public on September 5, 2024 and sell it today you would lose (260.00) from holding Forth Public or give up 18.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.41%
ValuesDaily Returns

Forth Public  vs.  The Siam Cement

 Performance 
JavaScript chart by amCharts 3.21.15SepOctNov -1001020
JavaScript chart by amCharts 3.21.15FORTH SCC
       Timeline  
Forth Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Forth Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1111.51212.51313.51414.515
Siam Cement 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days The Siam Cement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec180190200210220230240250

Forth Public and Siam Cement Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.26-7.68-5.11-2.53-0.04292.55.087.6610.2412.83 0.020.040.060.08
JavaScript chart by amCharts 3.21.15FORTH SCC
       Returns  

Pair Trading with Forth Public and Siam Cement

The main advantage of trading using opposite Forth Public and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forth Public position performs unexpectedly, Siam Cement 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 Siam Cement will offset losses from the drop in Siam Cement's long position.
The idea behind Forth Public and The Siam Cement 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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