Correlation Between Tipco Asphalt and Siam Technic

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

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

Diversification Opportunities for Tipco Asphalt and Siam Technic

0.35

Correlation Coefficient

Tipco Asphalt  Siam Technic

Weak diversification

The 3 months correlation between Tipco and Siam is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tipco Asphalt Public 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 Tipco Asphalt 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 Tipco Asphalt Public 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 Tipco Asphalt i.e., Tipco Asphalt and Siam Technic go up and down completely randomly.

Pair Corralation between Tipco Asphalt and Siam Technic

Assuming the 90 days trading horizon Tipco Asphalt Public is expected to under-perform the Siam Technic. In addition to that, Tipco Asphalt is 1.25 times more volatile than Siam Technic Concrete. It trades about -0.16 of its total potential returns per unit of risk. Siam Technic Concrete is currently generating about -0.07 per unit of volatility. If you would invest  106.00  in Siam Technic Concrete on December 30, 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

Tipco Asphalt Public  vs.  Siam Technic Concrete

Tipco Asphalt Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tipco Asphalt 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company 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 Tipco Asphalt and Siam Technic

The main advantage of trading using opposite Tipco Asphalt and Siam Technic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tipco Asphalt 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 Tipco Asphalt Public 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.