Correlation Between Home Product and Siam Wellness
Can any of the company-specific risk be diversified away by investing in both Home Product and Siam Wellness 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 Home Product and Siam Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Product Center and Siam Wellness Group, you can compare the effects of market volatilities on Home Product and Siam Wellness 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 Home Product with a short position of Siam Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Product and Siam Wellness.
Diversification Opportunities for Home Product and Siam Wellness
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Home and Siam is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Home Product Center and Siam Wellness Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Wellness Group and Home Product 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 Home Product Center are associated (or correlated) with Siam Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Wellness Group has no effect on the direction of Home Product i.e., Home Product and Siam Wellness go up and down completely randomly.
Pair Corralation between Home Product and Siam Wellness
Assuming the 90 days trading horizon Home Product Center is expected to generate 0.85 times more return on investment than Siam Wellness. However, Home Product Center is 1.17 times less risky than Siam Wellness. It trades about -0.11 of its potential returns per unit of risk. Siam Wellness Group is currently generating about -0.19 per unit of risk. If you would invest 970.00 in Home Product Center on December 4, 2024 and sell it today you would lose (160.00) from holding Home Product Center or give up 16.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.33% |
Values | Daily Returns |
Home Product Center vs. Siam Wellness Group
Performance |
Timeline |
Home Product Center |
Siam Wellness Group |
Home Product and Siam Wellness Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Home Product and Siam Wellness
The main advantage of trading using opposite Home Product and Siam Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Product position performs unexpectedly, Siam Wellness 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 Wellness will offset losses from the drop in Siam Wellness' long position.Home Product vs. CP ALL Public | Home Product vs. Bangkok Dusit Medical | Home Product vs. Central Pattana Public | Home Product vs. Advanced Info Service |
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Check out your portfolio center.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..
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