Correlation Between Siam Technic and Sri Panwa

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

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

Diversification Opportunities for Siam Technic and Sri Panwa

0.43

Correlation Coefficient

Siam Technic  Sri Panwa

Very weak diversification

The 3 months correlation between Siam and Sri is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Siam Technic Concrete and Sri panwa Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri panwa Hospitality and Siam Technic 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 Technic Concrete are associated (or correlated) with Sri Panwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri panwa Hospitality has no effect on the direction of Siam Technic i.e., Siam Technic and Sri Panwa go up and down completely randomly.

Pair Corralation between Siam Technic and Sri Panwa

Assuming the 90 days trading horizon Siam Technic Concrete is expected to under-perform the Sri Panwa. But the stock apears to be less risky and, when comparing its historical volatility, Siam Technic Concrete is 1.87 times less risky than Sri Panwa. The stock trades about -0.07 of its potential returns per unit of risk. The Sri panwa Hospitality is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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

Siam Technic Concrete  vs.  Sri panwa Hospitality

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.

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.

Pair Trading with Siam Technic and Sri Panwa

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

The idea behind Siam Technic Concrete and Sri panwa Hospitality 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.