Correlation Between Asia Aviation and WICE Logistics
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and WICE Logistics 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 WICE Logistics 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 WICE Logistics PCL, you can compare the effects of market volatilities on Asia Aviation and WICE Logistics 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 WICE Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and WICE Logistics.
Diversification Opportunities for Asia Aviation and WICE Logistics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and WICE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and WICE Logistics PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICE Logistics PCL 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 WICE Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICE Logistics PCL has no effect on the direction of Asia Aviation i.e., Asia Aviation and WICE Logistics go up and down completely randomly.
Pair Corralation between Asia Aviation and WICE Logistics
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 29.33 times more return on investment than WICE Logistics. However, Asia Aviation is 29.33 times more volatile than WICE Logistics PCL. It trades about 0.08 of its potential returns per unit of risk. WICE Logistics PCL is currently generating about -0.06 per unit of risk. If you would invest 222.00 in Asia Aviation Public on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Asia Aviation Public or generate 27.03% 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. WICE Logistics PCL
Performance |
| Timeline |
| Asia Aviation Public |
| WICE Logistics PCL |
Asia Aviation and WICE Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Aviation and WICE Logistics
The main advantage of trading using opposite Asia Aviation and WICE Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, WICE Logistics 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 WICE Logistics will offset losses from the drop in WICE Logistics' 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 |
| WICE Logistics vs. Asia Aviation Public | WICE Logistics vs. Bangkok Dusit Medical | WICE Logistics vs. Bangkok Expressway and | WICE Logistics 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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