Correlation Between Rich Sport and Siam Cement

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

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

Diversification Opportunities for Rich Sport and Siam Cement

0.68

Correlation Coefficient

Rich Sport  Siam Cement

Poor diversification

The 3 months correlation between Rich and Siam is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rich Sport Public and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and Rich Sport 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 Rich Sport Public are associated (or correlated) with Siam Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Cement has no effect on the direction of Rich Sport i.e., Rich Sport and Siam Cement go up and down completely randomly.

Pair Corralation between Rich Sport and Siam Cement

Assuming the 90 days trading horizon Rich Sport Public is expected to generate 0.44 times more return on investment than Siam Cement. However, Rich Sport Public is 2.27 times less risky than Siam Cement. It trades about -0.04 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.02 per unit of risk. If you would invest  188.00  in Rich Sport Public on December 27, 2024 and sell it today you would lose (8.00) from holding Rich Sport Public or give up 4.26% of portfolio value over 90 days.

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

Rich Sport Public  vs.  The Siam Cement

Rich Sport Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rich Sport Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Rich Sport is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Siam Cement

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Siam Cement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Siam Cement 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 Rich Sport and Siam Cement

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

The idea behind Rich Sport Public and The Siam Cement 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.