Correlation Between CIMB Thai and Silicon Craft

Can any of the company-specific risk be diversified away by investing in both CIMB Thai and Silicon Craft 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 CIMB Thai and Silicon Craft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CIMB Thai Bank and Silicon Craft Technology, you can compare the effects of market volatilities on CIMB Thai and Silicon Craft 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 CIMB Thai with a short position of Silicon Craft. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and Silicon Craft.

Diversification Opportunities for CIMB Thai and Silicon Craft

0.87

Correlation Coefficient

CIMB Thai  Silicon Craft

Very poor diversification

The 3 months correlation between CIMB and Silicon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and Silicon Craft Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Craft Technology and CIMB Thai 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 CIMB Thai Bank are associated (or correlated) with Silicon Craft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Craft Technology has no effect on the direction of CIMB Thai i.e., CIMB Thai and Silicon Craft go up and down completely randomly.

Pair Corralation between CIMB Thai and Silicon Craft

Assuming the 90 days trading horizon CIMB Thai Bank is expected to generate 1.21 times more return on investment than Silicon Craft. However, CIMB Thai is 1.21 times more volatile than Silicon Craft Technology. It trades about -0.01 of its potential returns per unit of risk. Silicon Craft Technology is currently generating about -0.08 per unit of risk. If you would invest  45.00  in CIMB Thai Bank on April 21, 2025 and sell it today you would lose (8.00) from holding CIMB Thai Bank or give up 17.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.62%
Values	Daily Returns

CIMB Thai Bank  vs.  Silicon Craft Technology

CIMB Thai Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIMB Thai Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Silicon Craft Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silicon Craft Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with CIMB Thai and Silicon Craft

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

The idea behind CIMB Thai Bank and Silicon Craft Technology 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.