Correlation Between Fevertree Drinks and Siamgas

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

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

Diversification Opportunities for Fevertree Drinks and Siamgas

-0.1

Correlation Coefficient

Fevertree Drinks  Siamgas

Good diversification

The 3 months correlation between Fevertree and Siamgas is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks PLC and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche and Fevertree Drinks 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 Fevertree Drinks PLC are associated (or correlated) with Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of Fevertree Drinks i.e., Fevertree Drinks and Siamgas go up and down completely randomly.

Pair Corralation between Fevertree Drinks and Siamgas

Assuming the 90 days trading horizon Fevertree Drinks is expected to generate 1.32 times less return on investment than Siamgas. But when comparing it to its historical volatility, Fevertree Drinks PLC is 2.09 times less risky than Siamgas. It trades about 0.06 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Siamgas And Petrochemicals on December 25, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fevertree Drinks PLC  vs.  Siamgas And Petrochemicals

Fevertree Drinks PLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fevertree Drinks PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fevertree Drinks unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Fevertree Drinks and Siamgas

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

The idea behind Fevertree Drinks PLC and Siamgas And Petrochemicals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.