Correlation Between Siamgas and Ekarat Engineering

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

By analyzing existing cross correlation between Siamgas and Petrochemicals and Ekarat Engineering Public, you can compare the effects of market volatilities on Siamgas and Ekarat 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 Siamgas with a short position of Ekarat Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and Ekarat Engineering.

Diversification Opportunities for Siamgas and Ekarat Engineering

0.31

Correlation Coefficient

Siamgas  Ekarat Engineering

Weak diversification

The 3 months correlation between Siamgas and Ekarat is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas and Petrochemicals and Ekarat Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekarat Engineering Public and Siamgas 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 Siamgas and Petrochemicals are associated (or correlated) with Ekarat Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekarat Engineering Public has no effect on the direction of Siamgas i.e., Siamgas and Ekarat Engineering go up and down completely randomly.

Pair Corralation between Siamgas and Ekarat Engineering

Assuming the 90 days trading horizon Siamgas and Petrochemicals is expected to under-perform the Ekarat Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Siamgas and Petrochemicals is 1.23 times less risky than Ekarat Engineering. The stock trades about -0.04 of its potential returns per unit of risk. The Ekarat Engineering Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Ekarat Engineering Public on December 2, 2024 and sell it today you would earn a total of  7.00  from holding Ekarat Engineering Public or generate 7.37% return on investment over 90 days.

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

Siamgas and Petrochemicals  vs.  Ekarat Engineering Public

Siamgas and Petroche

Risk-Adjusted Performance

Very Weak

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

Ekarat Engineering Public

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ekarat Engineering Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Ekarat Engineering may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Siamgas and Ekarat Engineering

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

The idea behind Siamgas and Petrochemicals and Ekarat 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.