Correlation Between Asia Aviation and Bangkok Dusit
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Bangkok Dusit 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 Bangkok Dusit 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 Bangkok Dusit Medical, you can compare the effects of market volatilities on Asia Aviation and Bangkok Dusit 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 Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Bangkok Dusit.
Diversification Opportunities for Asia Aviation and Bangkok Dusit
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and Bangkok is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical 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 Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of Asia Aviation i.e., Asia Aviation and Bangkok Dusit go up and down completely randomly.
Pair Corralation between Asia Aviation and Bangkok Dusit
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 1.12 times more return on investment than Bangkok Dusit. However, Asia Aviation is 1.12 times more volatile than Bangkok Dusit Medical. It trades about -0.11 of its potential returns per unit of risk. Bangkok Dusit Medical is currently generating about -0.28 per unit of risk. If you would invest 294.00 in Asia Aviation Public on September 2, 2024 and sell it today you would lose (12.00) from holding Asia Aviation Public or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Aviation Public vs. Bangkok Dusit Medical
Performance |
| Timeline |
| Asia Aviation Public |
| Bangkok Dusit Medical |
Asia Aviation and Bangkok Dusit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Bangkok Dusit
The main advantage of trading using opposite Asia Aviation and Bangkok Dusit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Bangkok Dusit 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 Bangkok Dusit will offset losses from the drop in Bangkok Dusit'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 |
| Bangkok Dusit vs. AP Public | Bangkok Dusit vs. Advanced Information Technology | Bangkok Dusit vs. AJ Plast Public | Bangkok Dusit vs. Berli Jucker 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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