Correlation Between Asia Aviation and Banpu Public
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Banpu Public 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 Banpu Public 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 Banpu Public, you can compare the effects of market volatilities on Asia Aviation and Banpu Public 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 Banpu Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Banpu Public.
Diversification Opportunities for Asia Aviation and Banpu Public
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Asia and Banpu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Banpu Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu Public 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 Banpu Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu Public has no effect on the direction of Asia Aviation i.e., Asia Aviation and Banpu Public go up and down completely randomly.
Pair Corralation between Asia Aviation and Banpu Public
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 21.21 times more return on investment than Banpu Public. However, Asia Aviation is 21.21 times more volatile than Banpu Public. It trades about 0.04 of its potential returns per unit of risk. Banpu Public is currently generating about -0.06 per unit of risk. If you would invest 288.00 in Asia Aviation Public on November 27, 2024 and sell it today you would lose (78.00) from holding Asia Aviation Public or give up 27.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Aviation Public vs. Banpu Public
Performance |
| Timeline |
| Asia Aviation Public |
| Banpu Public |
Asia Aviation and Banpu Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Banpu Public
The main advantage of trading using opposite Asia Aviation and Banpu Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Banpu Public 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 Banpu Public will offset losses from the drop in Banpu Public's long position.| Asia Aviation vs. Airports of Thailand | Asia Aviation vs. Bangkok Expressway and | Asia Aviation vs. BTS Group Holdings | Asia Aviation vs. Bangkok Airways Public |
| Banpu Public vs. PTT Public | Banpu Public vs. PTT Exploration and | Banpu Public vs. Bangkok Bank Public | Banpu Public vs. Thai Oil Public |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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