Correlation Between G Capital and Siam Cement

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

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

Diversification Opportunities for G Capital and Siam Cement

0.66

Correlation Coefficient

G Capital  Siam Cement

Poor diversification

The 3 months correlation between GCAP and Siam is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding G Capital 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 G 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 G Capital 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 G Capital i.e., G Capital and Siam Cement go up and down completely randomly.

Pair Corralation between G Capital and Siam Cement

Assuming the 90 days trading horizon G Capital Public is expected to generate 2.23 times more return on investment than Siam Cement. However, G Capital is 2.23 times more volatile than The Siam Cement. It trades about 0.1 of its potential returns per unit of risk. The Siam Cement is currently generating about 0.17 per unit of risk. If you would invest  21.00  in G Capital Public on April 21, 2025 and sell it today you would earn a total of  6.00  from holding G Capital Public or generate 28.57% return on investment over 90 days.

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

G Capital Public  vs.  The Siam Cement

G Capital Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G Capital Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, G Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 conflicting fundamental indicators, Siam Cement disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Capital and Siam Cement

The main advantage of trading using opposite G Capital and Siam Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Capital 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 G Capital 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 Transaction History module to view history of all your transactions and understand their impact on performance.