Correlation Between Siam City and OSOTSPA PCL

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

Diversification Opportunities for Siam City and OSOTSPA PCL

-0.07

Correlation Coefficient

Siam City  OSOTSPA PCL

Good diversification

The 3 months correlation between Siam and OSOTSPA is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Siam City Cement and OSOTSPA PCL NVDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSOTSPA PCL NVDR 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 OSOTSPA PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSOTSPA PCL NVDR has no effect on the direction of Siam City i.e., Siam City and OSOTSPA PCL go up and down completely randomly.

Pair Corralation between Siam City and OSOTSPA PCL

Assuming the 90 days trading horizon Siam City Cement is expected to generate 0.57 times more return on investment than OSOTSPA PCL. However, Siam City Cement is 1.76 times less risky than OSOTSPA PCL. It trades about 0.1 of its potential returns per unit of risk. OSOTSPA PCL NVDR is currently generating about -0.2 per unit of risk. If you would invest  14,650  in Siam City Cement on December 24, 2024 and sell it today you would earn a total of  1,250  from holding Siam City Cement or generate 8.53% 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.  OSOTSPA PCL NVDR

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.

OSOTSPA PCL NVDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days OSOTSPA PCL NVDR 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Siam City and OSOTSPA PCL

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

The idea behind Siam City Cement and OSOTSPA PCL NVDR 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..