Correlation Between Siam City and Gunkul Engineering

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

Diversification Opportunities for Siam City and Gunkul Engineering

0.23

Correlation Coefficient

Siam City  Gunkul Engineering

Modest diversification

The 3 months correlation between Siam and Gunkul is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Siam City Cement and Gunkul Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunkul Engineering 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 Gunkul Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunkul Engineering Public has no effect on the direction of Siam City i.e., Siam City and Gunkul Engineering go up and down completely randomly.

Pair Corralation between Siam City and Gunkul Engineering

Assuming the 90 days trading horizon Siam City Cement is expected to generate 0.61 times more return on investment than Gunkul Engineering. However, Siam City Cement is 1.65 times less risky than Gunkul Engineering. It trades about -0.03 of its potential returns per unit of risk. Gunkul Engineering Public is currently generating about -0.2 per unit of risk. If you would invest  16,800  in Siam City Cement on October 7, 2024 and sell it today you would lose (500.00) from holding Siam City Cement or give up 2.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Siam City Cement  vs.  Gunkul Engineering Public

Siam City Cement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam City Cement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Siam City is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Gunkul Engineering Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gunkul Engineering Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Siam City and Gunkul Engineering

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

The idea behind Siam City Cement and Gunkul Engineering 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.