Correlation Between Vibhavadi Medical and Siam Technic

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

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

Diversification Opportunities for Vibhavadi Medical and Siam Technic

0.26

Correlation Coefficient

Vibhavadi Medical  Siam Technic

Modest diversification

The 3 months correlation between Vibhavadi and Siam is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vibhavadi Medical Center 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 Vibhavadi Medical 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 Vibhavadi Medical Center 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 Vibhavadi Medical i.e., Vibhavadi Medical and Siam Technic go up and down completely randomly.

Pair Corralation between Vibhavadi Medical and Siam Technic

Assuming the 90 days trading horizon Vibhavadi Medical Center is expected to generate 0.89 times more return on investment than Siam Technic. However, Vibhavadi Medical Center is 1.12 times less risky than Siam Technic. It trades about -0.05 of its potential returns per unit of risk. Siam Technic Concrete is currently generating about -0.1 per unit of risk. If you would invest  218.00  in Vibhavadi Medical Center on September 4, 2024 and sell it today you would lose (14.00) from holding Vibhavadi Medical Center or give up 6.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Vibhavadi Medical Center  vs.  Siam Technic Concrete

Vibhavadi Medical Center

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Vibhavadi Medical Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Vibhavadi Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Siam Technic Concrete

Risk-Adjusted Performance

0 of 100

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 latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Vibhavadi Medical and Siam Technic

The main advantage of trading using opposite Vibhavadi Medical and Siam Technic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vibhavadi Medical 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 Vibhavadi Medical Center 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.