Correlation Between Siam Pan and Siri Prime

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

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

Diversification Opportunities for Siam Pan and Siri Prime

-0.15

Correlation Coefficient

Siam Pan  Siri Prime

Good diversification

The 3 months correlation between Siam and Siri is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Siam Pan Group and Siri Prime Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siri Prime Office and Siam Pan 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 Pan Group are associated (or correlated) with Siri Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siri Prime Office has no effect on the direction of Siam Pan i.e., Siam Pan and Siri Prime go up and down completely randomly.

Pair Corralation between Siam Pan and Siri Prime

Assuming the 90 days trading horizon Siam Pan Group is expected to under-perform the Siri Prime. But the stock apears to be less risky and, when comparing its historical volatility, Siam Pan Group is 1.1 times less risky than Siri Prime. The stock trades about -0.01 of its potential returns per unit of risk. The Siri Prime Office is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  177.00  in Siri Prime Office on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Siri Prime Office or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

Siam Pan Group  vs.  Siri Prime Office

Siam Pan Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siam Pan Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Siam Pan disclosed solid returns over the last few months and may actually be approaching a breakup point.

Siri Prime Office

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siri Prime Office has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Siri Prime 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 Pan and Siri Prime

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

The idea behind Siam Pan Group and Siri Prime Office 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.