Correlation Between Airports and Clover Power
Can any of the company-specific risk be diversified away by investing in both Airports and Clover Power 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 Clover Power 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 Clover Power PCL, you can compare the effects of market volatilities on Airports and Clover Power 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 Clover Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Clover Power.
Diversification Opportunities for Airports and Clover Power
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Airports and Clover is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Clover Power PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Power PCL 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 Clover Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clover Power PCL has no effect on the direction of Airports i.e., Airports and Clover Power go up and down completely randomly.
Pair Corralation between Airports and Clover Power
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.92 times more return on investment than Clover Power. However, Airports of Thailand is 1.09 times less risky than Clover Power. It trades about -0.18 of its potential returns per unit of risk. Clover Power PCL is currently generating about -0.31 per unit of risk. If you would invest 7,070 in Airports of Thailand on August 28, 2024 and sell it today you would lose (945.00) from holding Airports of Thailand or give up 13.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Clover Power PCL
Performance |
| Timeline |
| Airports of Thailand |
| Clover Power PCL |
Airports and Clover Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Clover Power
The main advantage of trading using opposite Airports and Clover Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Clover Power 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 Clover Power will offset losses from the drop in Clover Power's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| Clover Power vs. Delta Electronics Public | Clover Power vs. Delta Electronics Public | Clover Power vs. Airports of Thailand | Clover Power 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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