Correlation Between Thantawan Industry and Siam City

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

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

Diversification Opportunities for Thantawan Industry and Siam City

0.23

Correlation Coefficient

Thantawan Industry  Siam City

Modest diversification

The 3 months correlation between Thantawan and Siam is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Thantawan Industry Public and Siam City Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam City Cement and Thantawan Industry 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 Thantawan Industry Public are associated (or correlated) with Siam City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam City Cement has no effect on the direction of Thantawan Industry i.e., Thantawan Industry and Siam City go up and down completely randomly.

Pair Corralation between Thantawan Industry and Siam City

Assuming the 90 days trading horizon Thantawan Industry Public is expected to under-perform the Siam City. In addition to that, Thantawan Industry is 1.41 times more volatile than Siam City Cement. It trades about -0.08 of its total potential returns per unit of risk. Siam City Cement is currently generating about 0.0 per unit of volatility. If you would invest  15,661  in Siam City Cement on December 30, 2024 and sell it today you would lose (61.00) from holding Siam City Cement or give up 0.39% of portfolio value over 90 days.

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

Thantawan Industry Public  vs.  Siam City Cement

Thantawan Industry Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thantawan Industry Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Thantawan Industry is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Siam City Cement

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siam City Cement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Siam City 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 Thantawan Industry and Siam City

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

The idea behind Thantawan Industry Public and Siam City Cement 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.