Correlation Between Asia Aviation and Thai Capital
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and Thai Capital 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 Thai Capital 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 Thai Capital, you can compare the effects of market volatilities on Asia Aviation and Thai Capital 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 Thai Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and Thai Capital.
Diversification Opportunities for Asia Aviation and Thai Capital
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and Thai is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and Thai Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Capital 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 Thai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Capital has no effect on the direction of Asia Aviation i.e., Asia Aviation and Thai Capital go up and down completely randomly.
Pair Corralation between Asia Aviation and Thai Capital
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 1.0 times more return on investment than Thai Capital. However, Asia Aviation Public is 1.0 times less risky than Thai Capital. It trades about 0.04 of its potential returns per unit of risk. Thai Capital is currently generating about 0.04 per unit of risk. If you would invest 300.00 in Asia Aviation Public on September 12, 2024 and sell it today you would lose (18.00) from holding Asia Aviation Public or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Aviation Public vs. Thai Capital
Performance |
| Timeline |
| Asia Aviation Public |
| Thai Capital |
Asia Aviation and Thai Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and Thai Capital
The main advantage of trading using opposite Asia Aviation and Thai Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, Thai Capital 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 Thai Capital will offset losses from the drop in Thai Capital'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 |
| Thai Capital vs. Tata Steel Public | Thai Capital vs. TTCL Public | Thai Capital vs. Thaifoods Group Public | Thai Capital vs. TMT Steel 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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