Correlation Between SE Education and Siam Technic

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

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

Diversification Opportunities for SE Education and Siam Technic

0.88

Correlation Coefficient

SE Education  Siam Technic

Very poor diversification

The 3 months correlation between SE-ED and Siam is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SE Education Public and Siam Technic Concrete in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Technic Concrete and SE Education 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 SE Education Public are associated (or correlated) with Siam Technic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Technic Concrete has no effect on the direction of SE Education i.e., SE Education and Siam Technic go up and down completely randomly.

Pair Corralation between SE Education and Siam Technic

Assuming the 90 days trading horizon SE Education Public is expected to generate 33.53 times more return on investment than Siam Technic. However, SE Education is 33.53 times more volatile than Siam Technic Concrete. It trades about 0.06 of its potential returns per unit of risk. Siam Technic Concrete is currently generating about -0.07 per unit of risk. If you would invest  228.00  in SE Education Public on October 1, 2024 and sell it today you would lose (24.00) from holding SE Education Public or give up 10.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.59%
Values	Daily Returns

SE Education Public  vs.  Siam Technic Concrete

SE Education Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SE Education Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Siam Technic Concrete

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siam Technic Concrete 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 fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SE Education and Siam Technic

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

The idea behind SE Education Public and Siam Technic Concrete 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.