Correlation Between AEGEAN AIRLINES and KRUNGTHAI CARD
Can any of the company-specific risk be diversified away by investing in both AEGEAN AIRLINES and KRUNGTHAI CARD 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 AEGEAN AIRLINES and KRUNGTHAI CARD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AEGEAN AIRLINES and KRUNGTHAI CARD FGN, you can compare the effects of market volatilities on AEGEAN AIRLINES and KRUNGTHAI CARD 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 AEGEAN AIRLINES with a short position of KRUNGTHAI CARD. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEGEAN AIRLINES and KRUNGTHAI CARD.
Diversification Opportunities for AEGEAN AIRLINES and KRUNGTHAI CARD
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AEGEAN and KRUNGTHAI is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AEGEAN AIRLINES and KRUNGTHAI CARD FGN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRUNGTHAI CARD FGN and AEGEAN AIRLINES 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 AEGEAN AIRLINES are associated (or correlated) with KRUNGTHAI CARD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRUNGTHAI CARD FGN has no effect on the direction of AEGEAN AIRLINES i.e., AEGEAN AIRLINES and KRUNGTHAI CARD go up and down completely randomly.
Pair Corralation between AEGEAN AIRLINES and KRUNGTHAI CARD
Assuming the 90 days trading horizon AEGEAN AIRLINES is expected to generate 1.06 times more return on investment than KRUNGTHAI CARD. However, AEGEAN AIRLINES is 1.06 times more volatile than KRUNGTHAI CARD FGN. It trades about 0.06 of its potential returns per unit of risk. KRUNGTHAI CARD FGN is currently generating about 0.01 per unit of risk. If you would invest 689.00 in AEGEAN AIRLINES on October 29, 2024 and sell it today you would earn a total of 365.00 from holding AEGEAN AIRLINES or generate 52.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AEGEAN AIRLINES vs. KRUNGTHAI CARD FGN
Performance |
| Timeline |
| AEGEAN AIRLINES |
| KRUNGTHAI CARD FGN |
AEGEAN AIRLINES and KRUNGTHAI CARD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AEGEAN AIRLINES and KRUNGTHAI CARD
The main advantage of trading using opposite AEGEAN AIRLINES and KRUNGTHAI CARD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEGEAN AIRLINES position performs unexpectedly, KRUNGTHAI CARD 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 KRUNGTHAI CARD will offset losses from the drop in KRUNGTHAI CARD's long position.| AEGEAN AIRLINES vs. Q2M Managementberatung AG | AEGEAN AIRLINES vs. Cleanaway Waste Management | AEGEAN AIRLINES vs. H2O Retailing | AEGEAN AIRLINES vs. Ares Management Corp |
| KRUNGTHAI CARD vs. Westinghouse Air Brake | KRUNGTHAI CARD vs. SCANSOURCE | KRUNGTHAI CARD vs. NORWEGIAN AIR SHUT | KRUNGTHAI CARD vs. GOME Retail Holdings |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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