Correlation Between AirAsia Group and Nok Airlines
Can any of the company-specific risk be diversified away by investing in both AirAsia Group and Nok Airlines 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 AirAsia Group and Nok Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AirAsia Group Berhad and Nok Airlines Public, you can compare the effects of market volatilities on AirAsia Group and Nok Airlines 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 AirAsia Group with a short position of Nok Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirAsia Group and Nok Airlines.
Diversification Opportunities for AirAsia Group and Nok Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AirAsia and Nok is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AirAsia Group Berhad and Nok Airlines Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nok Airlines Public and AirAsia Group 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 AirAsia Group Berhad are associated (or correlated) with Nok Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nok Airlines Public has no effect on the direction of AirAsia Group i.e., AirAsia Group and Nok Airlines go up and down completely randomly.
Pair Corralation between AirAsia Group and Nok Airlines
If you would invest 17.00 in AirAsia Group Berhad on September 1, 2024 and sell it today you would earn a total of 3.00 from holding AirAsia Group Berhad or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AirAsia Group Berhad vs. Nok Airlines Public
Performance |
| Timeline |
| AirAsia Group Berhad |
| Nok Airlines Public |
AirAsia Group and Nok Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AirAsia Group and Nok Airlines
The main advantage of trading using opposite AirAsia Group and Nok Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AirAsia Group position performs unexpectedly, Nok Airlines 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 Nok Airlines will offset losses from the drop in Nok Airlines' long position.| AirAsia Group vs. Air New Zealand | AirAsia Group vs. ANA Holdings ADR | AirAsia Group vs. Cebu Air | AirAsia Group vs. Air France KLM SA |
| Nok Airlines vs. Academy Sports Outdoors | Nok Airlines vs. Mattel Inc | Nok Airlines vs. Analog Devices | Nok Airlines vs. Canlan Ice Sports |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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