Correlation Between Airports and II Group
Can any of the company-specific risk be diversified away by investing in both Airports and II Group 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 II Group 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 II Group Public, you can compare the effects of market volatilities on Airports and II Group 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 II Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and II Group.
Diversification Opportunities for Airports and II Group
Modest diversification
The 3 months correlation between Airports and IIG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and II Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on II Group 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 II Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of II Group Public has no effect on the direction of Airports i.e., Airports and II Group go up and down completely randomly.
Pair Corralation between Airports and II Group
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 1.41 times more return on investment than II Group. However, Airports is 1.41 times more volatile than II Group Public. It trades about 0.08 of its potential returns per unit of risk. II Group Public is currently generating about 0.05 per unit of risk. If you would invest 7,070 in Airports of Thailand on September 12, 2024 and sell it today you would lose (920.00) from holding Airports of Thailand or give up 13.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Airports of Thailand vs. II Group Public
Performance |
| Timeline |
| Airports of Thailand |
| II Group Public |
Airports and II Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and II Group
The main advantage of trading using opposite Airports and II Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, II Group 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 II Group will offset losses from the drop in II Group's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| II Group vs. Delta Electronics Public | II Group vs. Delta Electronics Public | II Group vs. Airports of Thailand | II Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |