Correlation Between Siam Cement and Sahamitr Pressure

Can any of the company-specific risk be diversified away by investing in both Siam Cement and Sahamitr Pressure 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 Sahamitr Pressure 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 Sahamitr Pressure Container, you can compare the effects of market volatilities on Siam Cement and Sahamitr Pressure 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 Sahamitr Pressure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Sahamitr Pressure.

Diversification Opportunities for Siam Cement and Sahamitr Pressure

0.11

Correlation Coefficient

Siam Cement  Sahamitr Pressure

Average diversification

The 3 months correlation between Siam and Sahamitr is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Sahamitr Pressure Container in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sahamitr Pressure 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 Sahamitr Pressure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sahamitr Pressure has no effect on the direction of Siam Cement i.e., Siam Cement and Sahamitr Pressure go up and down completely randomly.

Pair Corralation between Siam Cement and Sahamitr Pressure

Assuming the 90 days trading horizon The Siam Cement is expected to under-perform the Sahamitr Pressure. In addition to that, Siam Cement is 5.04 times more volatile than Sahamitr Pressure Container. It trades about -0.03 of its total potential returns per unit of risk. Sahamitr Pressure Container is currently generating about -0.09 per unit of volatility. If you would invest  940.00  in Sahamitr Pressure Container on December 30, 2024 and sell it today you would lose (35.00) from holding Sahamitr Pressure Container or give up 3.72% 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.  Sahamitr Pressure Container

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Sahamitr Pressure

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sahamitr Pressure Container has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sahamitr Pressure 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 Siam Cement and Sahamitr Pressure

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

The idea behind The Siam Cement and Sahamitr Pressure Container 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.