Correlation Between Siam Steel and Siam Steel

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

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

Diversification Opportunities for Siam Steel and Siam Steel

0.04

Correlation Coefficient

Siam Steel  Siam Steel

Significant diversification

The 3 months correlation between Siam and Siam is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Siam Steel International and Siam Steel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel Service and Siam Steel 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 Steel International are associated (or correlated) with Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel Service has no effect on the direction of Siam Steel i.e., Siam Steel and Siam Steel go up and down completely randomly.

Pair Corralation between Siam Steel and Siam Steel

Assuming the 90 days trading horizon Siam Steel International is expected to under-perform the Siam Steel. But the stock apears to be less risky and, when comparing its historical volatility, Siam Steel International is 1.14 times less risky than Siam Steel. The stock trades about -0.25 of its potential returns per unit of risk. The Siam Steel Service is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  206.00  in Siam Steel Service on December 20, 2024 and sell it today you would earn a total of  8.00  from holding Siam Steel Service or generate 3.88% return on investment over 90 days.

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

Siam Steel International  vs.  Siam Steel Service

Siam Steel International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siam Steel International 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 forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Siam Steel Service

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siam Steel Service are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Siam Steel is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Siam Steel and Siam Steel

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

The idea behind Siam Steel International and Siam Steel Service 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..