Correlation Between Siamese Asset and Peace Living

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

By analyzing existing cross correlation between Siamese Asset Public and Peace Living PCL, you can compare the effects of market volatilities on Siamese Asset and Peace Living 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 Siamese Asset with a short position of Peace Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamese Asset and Peace Living.

Diversification Opportunities for Siamese Asset and Peace Living

0.43

Correlation Coefficient

Siamese Asset  Peace Living

Very weak diversification

The 3 months correlation between Siamese and Peace is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Siamese Asset Public and Peace Living PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peace Living PCL and Siamese Asset 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 Siamese Asset Public are associated (or correlated) with Peace Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peace Living PCL has no effect on the direction of Siamese Asset i.e., Siamese Asset and Peace Living go up and down completely randomly.

Pair Corralation between Siamese Asset and Peace Living

Assuming the 90 days horizon Siamese Asset Public is expected to generate 0.68 times more return on investment than Peace Living. However, Siamese Asset Public is 1.48 times less risky than Peace Living. It trades about -0.04 of its potential returns per unit of risk. Peace Living PCL is currently generating about -0.08 per unit of risk. If you would invest  750.00  in Siamese Asset Public on December 1, 2024 and sell it today you would lose (20.00) from holding Siamese Asset Public or give up 2.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.67%
Values	Daily Returns

Siamese Asset Public  vs.  Peace Living PCL

Siamese Asset Public

Risk-Adjusted Performance

Very Weak

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

Peace Living PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peace Living PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Siamese Asset and Peace Living

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

The idea behind Siamese Asset Public and Peace Living PCL 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.