Correlation Between Airports and Salee Colour
Can any of the company-specific risk be diversified away by investing in both Airports and Salee Colour 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 Salee Colour 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 Salee Colour Public, you can compare the effects of market volatilities on Airports and Salee Colour 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 Salee Colour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Salee Colour.
Diversification Opportunities for Airports and Salee Colour
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Airports and Salee is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Salee Colour Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salee Colour Public 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 Salee Colour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salee Colour Public has no effect on the direction of Airports i.e., Airports and Salee Colour go up and down completely randomly.
Pair Corralation between Airports and Salee Colour
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the Salee Colour. In addition to that, Airports is 1.07 times more volatile than Salee Colour Public. It trades about -0.19 of its total potential returns per unit of risk. Salee Colour Public is currently generating about -0.02 per unit of volatility. If you would invest 115.00 in Salee Colour Public on September 1, 2024 and sell it today you would lose (3.00) from holding Salee Colour Public or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Airports of Thailand vs. Salee Colour Public
Performance |
| Timeline |
| Airports of Thailand |
| Salee Colour Public |
Airports and Salee Colour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Salee Colour
The main advantage of trading using opposite Airports and Salee Colour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Salee Colour 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 Salee Colour will offset losses from the drop in Salee Colour's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| Salee Colour vs. PTT Public | Salee Colour vs. The Siam Commercial | Salee Colour vs. Airports of Thailand | Salee Colour vs. CP ALL 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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