Correlation Between CP ALL and Siam Cement

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

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

Diversification Opportunities for CP ALL and Siam Cement

-0.16

Correlation Coefficient

CP ALL  Siam Cement

Good diversification

The 3 months correlation between CPALL and Siam is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and The Siam Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Cement and CP ALL 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 CP ALL Public are associated (or correlated) with Siam Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Cement has no effect on the direction of CP ALL i.e., CP ALL and Siam Cement go up and down completely randomly.

Pair Corralation between CP ALL and Siam Cement

Assuming the 90 days trading horizon CP ALL Public is expected to generate 0.83 times more return on investment than Siam Cement. However, CP ALL Public is 1.21 times less risky than Siam Cement. It trades about -0.02 of its potential returns per unit of risk. The Siam Cement is currently generating about -0.04 per unit of risk. If you would invest  6,075  in CP ALL Public on April 20, 2025 and sell it today you would lose (1,325) from holding CP ALL Public or give up 21.81% of portfolio value over 90 days.

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

CP ALL Public  vs.  The Siam Cement

CP ALL Public

Risk-Adjusted Performance

Very Weak

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

Siam Cement

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Siam Cement are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Siam Cement disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CP ALL and Siam Cement

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

The idea behind CP ALL Public and The Siam 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.