Correlation Between Airports and ALL ENERGY
Can any of the company-specific risk be diversified away by investing in both Airports and ALL ENERGY 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 Airports and ALL ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airports of Thailand and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on Airports and ALL ENERGY 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 Airports with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and ALL ENERGY.
Diversification Opportunities for Airports and ALL ENERGY
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and ALL is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and Airports 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 Airports of Thailand are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of Airports i.e., Airports and ALL ENERGY go up and down completely randomly.
Pair Corralation between Airports and ALL ENERGY
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 30.06 times more return on investment than ALL ENERGY. However, Airports is 30.06 times more volatile than ALL ENERGY UTILITIES. It trades about 0.11 of its potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about 0.02 per unit of risk. If you would invest 7,070 in Airports of Thailand on November 3, 2024 and sell it today you would lose (1,545) from holding Airports of Thailand or give up 21.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. ALL ENERGY UTILITIES
Performance |
| Timeline |
| Airports of Thailand |
| ALL ENERGY UTILITIES |
Airports and ALL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and ALL ENERGY
The main advantage of trading using opposite Airports and ALL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, ALL ENERGY 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 ALL ENERGY will offset losses from the drop in ALL ENERGY's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| ALL ENERGY vs. Delta Electronics Public | ALL ENERGY vs. Delta Electronics Public | ALL ENERGY vs. Airports of Thailand | ALL ENERGY 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |