Correlation Between Silicon Craft and Muang Thai

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

By analyzing existing cross correlation between Silicon Craft Technology and Muang Thai Insurance, you can compare the effects of market volatilities on Silicon Craft and Muang Thai 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 Silicon Craft with a short position of Muang Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Craft and Muang Thai.

Diversification Opportunities for Silicon Craft and Muang Thai

-0.64

Correlation Coefficient

Silicon Craft  Muang Thai

Excellent diversification

The 3 months correlation between Silicon and Muang is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Craft Technology and Muang Thai Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muang Thai Insurance and Silicon Craft 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 Silicon Craft Technology are associated (or correlated) with Muang Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muang Thai Insurance has no effect on the direction of Silicon Craft i.e., Silicon Craft and Muang Thai go up and down completely randomly.

Pair Corralation between Silicon Craft and Muang Thai

Assuming the 90 days trading horizon Silicon Craft Technology is expected to under-perform the Muang Thai. In addition to that, Silicon Craft is 1.29 times more volatile than Muang Thai Insurance. It trades about -0.18 of its total potential returns per unit of risk. Muang Thai Insurance is currently generating about 0.13 per unit of volatility. If you would invest  9,956  in Muang Thai Insurance on December 23, 2024 and sell it today you would earn a total of  994.00  from holding Muang Thai Insurance or generate 9.98% return on investment over 90 days.

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

Silicon Craft Technology  vs.  Muang Thai Insurance

Silicon Craft Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silicon Craft Technology 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.

Muang Thai Insurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Muang Thai Insurance are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Muang Thai may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Silicon Craft and Muang Thai

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

The idea behind Silicon Craft Technology and Muang Thai Insurance 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.