Correlation Between Siam Cement and T S

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

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

Diversification Opportunities for Siam Cement and T S

0.21

Correlation Coefficient

Siam Cement  T S

Modest diversification

The 3 months correlation between Siam and TMILL is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and T S Flour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T S Flour and Siam Cement 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 The Siam Cement are associated (or correlated) with T S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T S Flour has no effect on the direction of Siam Cement i.e., Siam Cement and T S go up and down completely randomly.

Pair Corralation between Siam Cement and T S

Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the T S. In addition to that, Siam Cement is 3.68 times more volatile than T S Flour. It trades about -0.24 of its total potential returns per unit of risk. T S Flour is currently generating about -0.26 per unit of volatility. If you would invest  362.00  in T S Flour on September 1, 2024 and sell it today you would lose (50.00) from holding T S Flour or give up 13.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

The Siam Cement  vs.  T S Flour

Siam Cement

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

T S Flour

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T S Flour are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, T S sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siam Cement and T S

The main advantage of trading using opposite Siam Cement and T S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, T S 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 T S will offset losses from the drop in T S's long position.

The idea behind The Siam Cement and T S Flour 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.