Correlation Between Nasdaq and Siam Steel

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

By analyzing existing cross correlation between Nasdaq Inc and Siam Steel Service, you can compare the effects of market volatilities on Nasdaq and Siam Steel 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 Siam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Siam Steel.

Diversification Opportunities for Nasdaq and Siam Steel

-0.13

Correlation Coefficient

Nasdaq  Siam Steel

Good diversification

The 3 months correlation between Nasdaq and Siam is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Siam Steel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel Service 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 Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel Service has no effect on the direction of Nasdaq i.e., Nasdaq and Siam Steel go up and down completely randomly.

Pair Corralation between Nasdaq and Siam Steel

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Siam Steel. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.25 times less risky than Siam Steel. The stock trades about -0.03 of its potential returns per unit of risk. The Siam Steel Service is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  204.00  in Siam Steel Service on December 22, 2024 and sell it today you would earn a total of  12.00  from holding Siam Steel Service or generate 5.88% return on investment over 90 days.

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

Nasdaq Inc  vs.  Siam Steel Service

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.

Siam Steel Service

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siam Steel Service are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Siam Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nasdaq and Siam Steel

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

The idea behind Nasdaq Inc and Siam Steel Service 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.