Correlation Between Siam Cement and Univanich Palm

Can any of the company-specific risk be diversified away by investing in both Siam Cement and Univanich Palm 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 Univanich Palm 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 Univanich Palm Oil, you can compare the effects of market volatilities on Siam Cement and Univanich Palm 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 Univanich Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Cement and Univanich Palm.

Diversification Opportunities for Siam Cement and Univanich Palm

0.58

Correlation Coefficient

Siam Cement  Univanich Palm

Very weak diversification

The 3 months correlation between Siam and Univanich is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Siam Cement and Univanich Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univanich Palm Oil 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 Univanich Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univanich Palm Oil has no effect on the direction of Siam Cement i.e., Siam Cement and Univanich Palm go up and down completely randomly.

Pair Corralation between Siam Cement and Univanich Palm

Assuming the 90 days trading horizon The Siam Cement is expected to generate 3.96 times more return on investment than Univanich Palm. However, Siam Cement is 3.96 times more volatile than Univanich Palm Oil. It trades about 0.18 of its potential returns per unit of risk. Univanich Palm Oil is currently generating about 0.13 per unit of risk. If you would invest  15,200  in The Siam Cement on April 24, 2025 and sell it today you would earn a total of  4,050  from holding The Siam Cement or generate 26.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

The Siam Cement  vs.  Univanich Palm Oil

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.

Univanich Palm Oil

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Univanich Palm Oil are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Univanich Palm is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Siam Cement and Univanich Palm

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

The idea behind The Siam Cement and Univanich Palm Oil 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.