Correlation Between Asia Aviation and Sriracha Construction
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Sriracha Construction 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 Sriracha Construction 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 Sriracha Construction Public, you can compare the effects of market volatilities on Asia Aviation and Sriracha Construction 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 Sriracha Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Sriracha Construction.
Diversification Opportunities for Asia Aviation and Sriracha Construction
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Sriracha is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Sriracha Construction Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sriracha Construction 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 Sriracha Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sriracha Construction has no effect on the direction of Asia Aviation i.e., Asia Aviation and Sriracha Construction go up and down completely randomly.
Pair Corralation between Asia Aviation and Sriracha Construction
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 20.31 times more return on investment than Sriracha Construction. However, Asia Aviation is 20.31 times more volatile than Sriracha Construction Public. It trades about 0.06 of its potential returns per unit of risk. Sriracha Construction Public is currently generating about 0.02 per unit of risk. If you would invest 194.00 in Asia Aviation Public on September 4, 2024 and sell it today you would earn a total of 92.00 from holding Asia Aviation Public or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Aviation Public vs. Sriracha Construction Public
Performance |
| Timeline |
| Asia Aviation Public |
| Sriracha Construction |
Asia Aviation and Sriracha Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Sriracha Construction
The main advantage of trading using opposite Asia Aviation and Sriracha Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Sriracha Construction 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 Sriracha Construction will offset losses from the drop in Sriracha Construction'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 |
| Sriracha Construction vs. Asia Aviation Public | Sriracha Construction vs. Bangkok Dusit Medical | Sriracha Construction vs. Bangkok Expressway and | Sriracha Construction vs. Airports of Thailand |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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