Correlation Between Asia Aviation and Airports
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Airports 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 Asia Aviation and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Aviation Public and Airports of Thailand, you can compare the effects of market volatilities on Asia Aviation and Airports 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 Asia Aviation with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Airports.
Diversification Opportunities for Asia Aviation and Airports
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and Airports is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and Asia Aviation 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 Asia Aviation Public are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Asia Aviation i.e., Asia Aviation and Airports go up and down completely randomly.
Pair Corralation between Asia Aviation and Airports
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 2.2 times more return on investment than Airports. However, Asia Aviation is 2.2 times more volatile than Airports of Thailand. It trades about 0.07 of its potential returns per unit of risk. Airports of Thailand is currently generating about -0.1 per unit of risk. If you would invest 264.00 in Asia Aviation Public on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Asia Aviation Public or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Aviation Public vs. Airports of Thailand
Performance |
| Timeline |
| Asia Aviation Public |
| Airports of Thailand |
Asia Aviation and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Airports
The main advantage of trading using opposite Asia Aviation and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Asia Aviation vs. Tata Steel Public | Asia Aviation vs. Thaifoods Group Public | Asia Aviation vs. TMT Steel Public | Asia Aviation vs. The Erawan Group |
| Airports vs. Tata Steel Public | Airports vs. Thaifoods Group Public | Airports vs. TMT Steel Public | Airports vs. The Erawan Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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