Correlation Between Rockworth Public and Siam Pan

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

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

Diversification Opportunities for Rockworth Public and Siam Pan

-0.02

Correlation Coefficient

Rockworth Public  Siam Pan

Good diversification

The 3 months correlation between Rockworth and Siam is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Rockworth Public and Siam Pan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Pan Group and Rockworth Public 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 Rockworth Public are associated (or correlated) with Siam Pan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Pan Group has no effect on the direction of Rockworth Public i.e., Rockworth Public and Siam Pan go up and down completely randomly.

Pair Corralation between Rockworth Public and Siam Pan

Assuming the 90 days trading horizon Rockworth Public is expected to generate 3.45 times more return on investment than Siam Pan. However, Rockworth Public is 3.45 times more volatile than Siam Pan Group. It trades about 0.05 of its potential returns per unit of risk. Siam Pan Group is currently generating about -0.07 per unit of risk. If you would invest  1,020  in Rockworth Public on October 26, 2024 and sell it today you would earn a total of  80.00  from holding Rockworth Public or generate 7.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Rockworth Public  vs.  Siam Pan Group

Rockworth Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rockworth Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Rockworth Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Siam Pan Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Pan Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Siam Pan is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Rockworth Public and Siam Pan

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

The idea behind Rockworth Public and Siam Pan 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.