Correlation Between Siam Cement and KCE Electronics

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

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

Diversification Opportunities for Siam Cement and KCE Electronics

0.55

Correlation Coefficient

Siam Cement  KCE Electronics

Very weak diversification

The 3 months correlation between Siam and KCE is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and KCE Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE Electronics Public and Siam Cement 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 The Siam Cement are associated (or correlated) with KCE Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE Electronics Public has no effect on the direction of Siam Cement i.e., Siam Cement and KCE Electronics go up and down completely randomly.

Pair Corralation between Siam Cement and KCE Electronics

Assuming the 90 days trading horizon The Siam Cement is expected to generate 0.75 times more return on investment than KCE Electronics. However, The Siam Cement is 1.32 times less risky than KCE Electronics. It trades about 0.18 of its potential returns per unit of risk. KCE Electronics Public is currently generating about 0.13 per unit of risk. If you would invest  15,000  in The Siam Cement on April 23, 2025 and sell it today you would earn a total of  4,250  from holding The Siam Cement or generate 28.33% return on investment over 90 days.

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

The Siam Cement  vs.  KCE Electronics Public

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 14 (%) 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.

KCE Electronics Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KCE Electronics Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, KCE Electronics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siam Cement and KCE Electronics

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

The idea behind The Siam Cement and KCE Electronics Public 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.