Correlation Between Sri Panwa and Siam Technic

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

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

Diversification Opportunities for Sri Panwa and Siam Technic

0.43

Correlation Coefficient

Sri Panwa  Siam Technic

Very weak diversification

The 3 months correlation between Sri and Siam is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sri panwa Hospitality 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 Sri Panwa 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 Sri panwa Hospitality 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 Sri Panwa i.e., Sri Panwa and Siam Technic go up and down completely randomly.

Pair Corralation between Sri Panwa and Siam Technic

Assuming the 90 days trading horizon Sri panwa Hospitality is expected to generate 1.87 times more return on investment than Siam Technic. However, Sri Panwa is 1.87 times more volatile than Siam Technic Concrete. It trades about 0.04 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  518.00  in Sri panwa Hospitality on December 30, 2024 and sell it today you would earn a total of  22.00  from holding Sri panwa Hospitality or generate 4.25% return on investment over 90 days.

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

Sri panwa Hospitality  vs.  Siam Technic Concrete

Sri panwa Hospitality

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sri panwa Hospitality are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sri Panwa is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Siam Technic Concrete

Risk-Adjusted Performance

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 somewhat strong fundamental drivers, Siam Technic is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sri Panwa and Siam Technic

The main advantage of trading using opposite Sri Panwa and Siam Technic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sri Panwa 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 Sri panwa Hospitality 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.