Correlation Between Siam Technic and Wave Entertainment

Can any of the company-specific risk be diversified away by investing in both Siam Technic and Wave Entertainment 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 Wave Entertainment 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 Wave Entertainment Public, you can compare the effects of market volatilities on Siam Technic and Wave Entertainment 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 Wave Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Technic and Wave Entertainment.

Diversification Opportunities for Siam Technic and Wave Entertainment

0.31

Correlation Coefficient

Siam Technic  Wave Entertainment

Weak diversification

The 3 months correlation between Siam and Wave is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Siam Technic Concrete and Wave Entertainment Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wave Entertainment Public 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 Wave Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wave Entertainment Public has no effect on the direction of Siam Technic i.e., Siam Technic and Wave Entertainment go up and down completely randomly.

Pair Corralation between Siam Technic and Wave Entertainment

Assuming the 90 days trading horizon Siam Technic Concrete is expected to generate 0.15 times more return on investment than Wave Entertainment. However, Siam Technic Concrete is 6.71 times less risky than Wave Entertainment. It trades about -0.07 of its potential returns per unit of risk. Wave Entertainment Public is currently generating about -0.04 per unit of risk. If you would invest  106.00  in Siam Technic Concrete on December 29, 2024 and sell it today you would lose (6.00) from holding Siam Technic Concrete or give up 5.66% of portfolio value over 90 days.

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

Siam Technic Concrete  vs.  Wave Entertainment Public

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.

Wave Entertainment Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wave Entertainment Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Pair Trading with Siam Technic and Wave Entertainment

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

The idea behind Siam Technic Concrete and Wave Entertainment Public 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.