Correlation Between Siam Makro and J Front

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

By analyzing existing cross correlation between Siam Makro PCL and J Front Retailing, you can compare the effects of market volatilities on Siam Makro and J Front 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 Makro with a short position of J Front. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siam Makro and J Front.

Diversification Opportunities for Siam Makro and J Front

0.27

Correlation Coefficient

Siam Makro  J Front

Modest diversification

The 3 months correlation between Siam and JFROF is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Siam Makro PCL and J Front Retailing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Front Retailing and Siam Makro 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 Siam Makro PCL are associated (or correlated) with J Front. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Front Retailing has no effect on the direction of Siam Makro i.e., Siam Makro and J Front go up and down completely randomly.

Pair Corralation between Siam Makro and J Front

If you would invest  987.00  in J Front Retailing on February 27, 2024 and sell it today you would earn a total of  0.00  from holding J Front Retailing or generate 0.0% return on investment over 90 days.

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

Siam Makro PCL  vs.  J Front Retailing

Siam Makro PCL

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siam Makro PCL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Siam Makro is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

J Front Retailing

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in J Front Retailing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, J Front is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Siam Makro and J Front

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

The idea behind Siam Makro PCL and J Front Retailing 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 Global Correlations module to find global opportunities by holding instruments from different markets.