Correlation Between Srisawad Capital and Siam Commercial

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

By analyzing existing cross correlation between Srisawad Capital 1969 and The Siam Commercial, you can compare the effects of market volatilities on Srisawad Capital and Siam Commercial 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 Srisawad Capital with a short position of Siam Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Srisawad Capital and Siam Commercial.

Diversification Opportunities for Srisawad Capital and Siam Commercial

-0.12

Correlation Coefficient

Srisawad Capital  Siam Commercial

Good diversification

The 3 months correlation between Srisawad and Siam is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Srisawad Capital 1969 and The Siam Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Commercial and Srisawad Capital 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 Srisawad Capital 1969 are associated (or correlated) with Siam Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Commercial has no effect on the direction of Srisawad Capital i.e., Srisawad Capital and Siam Commercial go up and down completely randomly.

Pair Corralation between Srisawad Capital and Siam Commercial

Assuming the 90 days trading horizon Srisawad Capital 1969 is expected to under-perform the Siam Commercial. In addition to that, Srisawad Capital is 2.62 times more volatile than The Siam Commercial. It trades about -0.1 of its total potential returns per unit of risk. The Siam Commercial is currently generating about -0.21 per unit of volatility. If you would invest  10,945  in The Siam Commercial on April 13, 2024 and sell it today you would lose (345.00) from holding The Siam Commercial or give up 3.15% of portfolio value over 90 days.

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

Srisawad Capital 1969  vs.  The Siam Commercial

Srisawad Capital 1969

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Srisawad Capital 1969 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 basic indicators remain quite persistent which may send shares a bit higher in August 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Siam Commercial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Srisawad Capital and Siam Commercial

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

The idea behind Srisawad Capital 1969 and The Siam Commercial 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.