Correlation Between Siam City and Akkhie Prakarn

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

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

Diversification Opportunities for Siam City and Akkhie Prakarn

-0.06

Correlation Coefficient

Siam City  Akkhie Prakarn

Good diversification

The 3 months correlation between Siam and Akkhie is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Siam City Cement and Akkhie Prakarn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akkhie Prakarn Public and Siam City 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 Siam City Cement are associated (or correlated) with Akkhie Prakarn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akkhie Prakarn Public has no effect on the direction of Siam City i.e., Siam City and Akkhie Prakarn go up and down completely randomly.

Pair Corralation between Siam City and Akkhie Prakarn

Assuming the 90 days trading horizon Siam City is expected to generate 1.04 times less return on investment than Akkhie Prakarn. But when comparing it to its historical volatility, Siam City Cement is 2.27 times less risky than Akkhie Prakarn. It trades about 0.1 of its potential returns per unit of risk. Akkhie Prakarn Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Akkhie Prakarn Public on December 22, 2024 and sell it today you would earn a total of  4.00  from holding Akkhie Prakarn Public or generate 6.25% return on investment over 90 days.

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

Siam City Cement  vs.  Akkhie Prakarn Public

Siam City Cement

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siam City Cement are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Siam City may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Akkhie Prakarn Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Akkhie Prakarn Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Akkhie Prakarn may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Siam City and Akkhie Prakarn

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

The idea behind Siam City Cement and Akkhie Prakarn Public 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.