Correlation Between Guangdong Investment and Siamgas

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

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

Diversification Opportunities for Guangdong Investment and Siamgas

0.21

Correlation Coefficient

Guangdong Investment  Siamgas

Modest diversification

The 3 months correlation between Guangdong and Siamgas is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited 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 Guangdong Investment 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 Guangdong Investment Limited 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 Guangdong Investment i.e., Guangdong Investment and Siamgas go up and down completely randomly.

Pair Corralation between Guangdong Investment and Siamgas

If you would invest  18.00  in Siamgas And Petrochemicals on October 26, 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Guangdong Investment Limited  vs.  Siamgas And Petrochemicals

Guangdong Investment

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guangdong Investment Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Guangdong Investment reported solid returns over the last few months and may actually be approaching a breakup point.

Siamgas And Petroche

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Siamgas may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guangdong Investment and Siamgas

The main advantage of trading using opposite Guangdong Investment and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment 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 Guangdong Investment Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.