Correlation Between Advanced Info and Siam City

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

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

Diversification Opportunities for Advanced Info and Siam City

-0.02

Correlation Coefficient

Advanced Info  Siam City

Good diversification

The 3 months correlation between Advanced and Siam is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service 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 Advanced Info 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 Advanced Info Service 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 Advanced Info i.e., Advanced Info and Siam City go up and down completely randomly.

Pair Corralation between Advanced Info and Siam City

Assuming the 90 days trading horizon Advanced Info Service is expected to under-perform the Siam City. In addition to that, Advanced Info is 2.51 times more volatile than Siam City Cement. It trades about -0.24 of its total potential returns per unit of risk. Siam City Cement is currently generating about 0.15 per unit of volatility. If you would invest  13,700  in Siam City Cement on February 15, 2024 and sell it today you would earn a total of  250.00  from holding Siam City Cement or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Advanced Info Service  vs.  Siam City Cement

Advanced Info Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Info Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Advanced Info is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siam City Cement

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siam City Cement are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, 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 Advanced Info and Siam City

The main advantage of trading using opposite Advanced Info and Siam City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info 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 Advanced Info Service 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.