Correlation Between Siam City and Kasikornbank Public

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

Diversification Opportunities for Siam City and Kasikornbank Public

-0.13

Correlation Coefficient

Siam City  Kasikornbank Public

Good diversification

The 3 months correlation between Siam and Kasikornbank is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Siam City Cement and Kasikornbank Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasikornbank 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 Kasikornbank Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasikornbank Public has no effect on the direction of Siam City i.e., Siam City and Kasikornbank Public go up and down completely randomly.

Pair Corralation between Siam City and Kasikornbank Public

Assuming the 90 days trading horizon Siam City Cement is expected to generate 2.53 times more return on investment than Kasikornbank Public. However, Siam City is 2.53 times more volatile than Kasikornbank Public. It trades about 0.22 of its potential returns per unit of risk. Kasikornbank Public is currently generating about 0.15 per unit of risk. If you would invest  14,650  in Siam City Cement on October 24, 2024 and sell it today you would earn a total of  1,450  from holding Siam City Cement or generate 9.9% 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.  Kasikornbank Public

Siam City Cement

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siam City Cement are ranked lower than 10 (%) 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 February 2025.

Kasikornbank Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kasikornbank Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kasikornbank Public may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Siam City and Kasikornbank Public

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

The idea behind Siam City Cement and Kasikornbank 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.