Correlation Between MFC Industrial and Siam Wellness

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

By analyzing existing cross correlation between MFC Industrial Investment and Siam Wellness Group, you can compare the effects of market volatilities on MFC Industrial 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 MFC Industrial with a short position of Siam Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFC Industrial and Siam Wellness.

Diversification Opportunities for MFC Industrial and Siam Wellness

0.92

Correlation Coefficient

MFC Industrial  Siam Wellness

Almost no diversification

The 3 months correlation between MFC and Siam is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding MFC Industrial Investment 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 MFC Industrial 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 MFC Industrial Investment 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 MFC Industrial i.e., MFC Industrial and Siam Wellness go up and down completely randomly.

Pair Corralation between MFC Industrial and Siam Wellness

Assuming the 90 days trading horizon MFC Industrial Investment is expected to under-perform the Siam Wellness. In addition to that, MFC Industrial is 4.43 times more volatile than Siam Wellness Group. It trades about -0.14 of its total potential returns per unit of risk. Siam Wellness Group is currently generating about -0.19 per unit of volatility. If you would invest  740.00  in Siam Wellness Group on December 1, 2024 and sell it today you would lose (225.00) from holding Siam Wellness Group or give up 30.41% of portfolio value over 90 days.

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

MFC Industrial Investment  vs.  Siam Wellness Group

MFC Industrial Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days MFC Industrial Investment 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 forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Siam Wellness Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siam Wellness Group 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 basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with MFC Industrial and Siam Wellness

The main advantage of trading using opposite MFC Industrial and Siam Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFC Industrial 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.

The idea behind MFC Industrial Investment and Siam Wellness Group 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.