Correlation Between Nasdaq and SiamEast Solutions

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

By analyzing existing cross correlation between Nasdaq Inc and SiamEast Solutions Public, you can compare the effects of market volatilities on Nasdaq and SiamEast Solutions 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 Nasdaq with a short position of SiamEast Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and SiamEast Solutions.

Diversification Opportunities for Nasdaq and SiamEast Solutions

-0.19

Correlation Coefficient

Nasdaq  SiamEast Solutions

Good diversification

The 3 months correlation between Nasdaq and SiamEast is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and SiamEast Solutions Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiamEast Solutions Public and Nasdaq 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 Nasdaq Inc are associated (or correlated) with SiamEast Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiamEast Solutions Public has no effect on the direction of Nasdaq i.e., Nasdaq and SiamEast Solutions go up and down completely randomly.

Pair Corralation between Nasdaq and SiamEast Solutions

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.7 times more return on investment than SiamEast Solutions. However, Nasdaq Inc is 1.43 times less risky than SiamEast Solutions. It trades about -0.03 of its potential returns per unit of risk. SiamEast Solutions Public is currently generating about -0.12 per unit of risk. If you would invest  7,714  in Nasdaq Inc on December 29, 2024 and sell it today you would lose (223.00) from holding Nasdaq Inc or give up 2.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Nasdaq Inc  vs.  SiamEast Solutions Public

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

SiamEast Solutions Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days SiamEast Solutions Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers 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 Nasdaq and SiamEast Solutions

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

The idea behind Nasdaq Inc and SiamEast Solutions Public 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 Valuation module to check real value of public entities based on technical and fundamental data.