Correlation Between Airports and Firetrade Engineering
Can any of the company-specific risk be diversified away by investing in both Airports and Firetrade Engineering 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 Firetrade Engineering 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 Firetrade Engineering Public, you can compare the effects of market volatilities on Airports and Firetrade Engineering 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 Firetrade Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Firetrade Engineering.
Diversification Opportunities for Airports and Firetrade Engineering
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airports and Firetrade is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Firetrade Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firetrade Engineering 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 Firetrade Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firetrade Engineering has no effect on the direction of Airports i.e., Airports and Firetrade Engineering go up and down completely randomly.
Pair Corralation between Airports and Firetrade Engineering
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the Firetrade Engineering. In addition to that, Airports is 2.87 times more volatile than Firetrade Engineering Public. It trades about -0.18 of its total potential returns per unit of risk. Firetrade Engineering Public is currently generating about 0.22 per unit of volatility. If you would invest 145.00 in Firetrade Engineering Public on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Firetrade Engineering Public or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Firetrade Engineering Public
Performance |
| Timeline |
| Airports of Thailand |
| Firetrade Engineering |
Airports and Firetrade Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Firetrade Engineering
The main advantage of trading using opposite Airports and Firetrade Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Firetrade Engineering 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 Firetrade Engineering will offset losses from the drop in Firetrade Engineering's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| Firetrade Engineering vs. Tata Steel Public | Firetrade Engineering vs. TTCL Public | Firetrade Engineering vs. Thaifoods Group Public | Firetrade Engineering vs. TMT Steel 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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