Correlation Between KBC Group and Siamgas

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

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

Diversification Opportunities for KBC Group and Siamgas

0.32

Correlation Coefficient

KBC Group  Siamgas

Weak diversification

The 3 months correlation between KBC and Siamgas is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding KBC Group NV 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 KBC Group 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 KBC Group NV 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 KBC Group i.e., KBC Group and Siamgas go up and down completely randomly.

Pair Corralation between KBC Group and Siamgas

Assuming the 90 days horizon KBC Group NV is expected to generate 0.5 times more return on investment than Siamgas. However, KBC Group NV is 2.02 times less risky than Siamgas. It trades about 0.13 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.01 per unit of risk. If you would invest  6,681  in KBC Group NV on October 26, 2024 and sell it today you would earn a total of  583.00  from holding KBC Group NV or generate 8.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

KBC Group NV  vs.  Siamgas And Petrochemicals

KBC Group NV

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Group NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KBC Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Siamgas And Petroche

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Siamgas And Petrochemicals has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with KBC Group and Siamgas

The main advantage of trading using opposite KBC Group and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Group 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 KBC Group NV 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.