Correlation Between Siam Cement and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both Siam Cement and KCE Electronics 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 KCE Electronics 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 KCE Electronics Public, you can compare the effects of market volatilities on Siam Cement and KCE Electronics 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 KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and KCE Electronics.
Diversification Opportunities for Siam Cement and KCE Electronics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siam and KCE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and KCE Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE Electronics Public 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 KCE Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE Electronics Public has no effect on the direction of Siam Cement i.e., Siam Cement and KCE Electronics go up and down completely randomly.
Pair Corralation between Siam Cement and KCE Electronics
Assuming the 90 days trading horizon The Siam Cement is expected to generate 1.08 times more return on investment than KCE Electronics. However, Siam Cement is 1.08 times more volatile than KCE Electronics Public. It trades about -0.02 of its potential returns per unit of risk. KCE Electronics Public is currently generating about -0.17 per unit of risk. If you would invest 16,800 in The Siam Cement on December 28, 2024 and sell it today you would lose (1,000.00) from holding The Siam Cement or give up 5.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
The Siam Cement vs. KCE Electronics Public
Performance |
Timeline |
Siam Cement |
KCE Electronics Public |
Siam Cement and KCE Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Siam Cement and KCE Electronics
The main advantage of trading using opposite Siam Cement and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siam Cement position performs unexpectedly, KCE Electronics 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 KCE Electronics will offset losses from the drop in KCE Electronics' long position.Siam Cement vs. Heng Leasing Capital | Siam Cement vs. Inoue Rubber Public | Siam Cement vs. Ally Leasehold Real | Siam Cement vs. Chiangmai Frozen Foods |
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Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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