Correlation Between Airports and Itthirit Nice
Can any of the company-specific risk be diversified away by investing in both Airports and Itthirit Nice 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 Itthirit Nice 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 Itthirit Nice Corp, you can compare the effects of market volatilities on Airports and Itthirit Nice 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 Itthirit Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Itthirit Nice.
Diversification Opportunities for Airports and Itthirit Nice
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and Itthirit is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Itthirit Nice Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itthirit Nice Corp 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 Itthirit Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itthirit Nice Corp has no effect on the direction of Airports i.e., Airports and Itthirit Nice go up and down completely randomly.
Pair Corralation between Airports and Itthirit Nice
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 15.62 times more return on investment than Itthirit Nice. However, Airports is 15.62 times more volatile than Itthirit Nice Corp. It trades about 0.06 of its potential returns per unit of risk. Itthirit Nice Corp is currently generating about -0.01 per unit of risk. If you would invest 7,537 in Airports of Thailand on September 19, 2024 and sell it today you would lose (1,612) from holding Airports of Thailand or give up 21.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.31% |
| Values | Daily Returns |
Airports of Thailand vs. Itthirit Nice Corp
Performance |
| Timeline |
| Airports of Thailand |
| Itthirit Nice Corp |
Airports and Itthirit Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Itthirit Nice
The main advantage of trading using opposite Airports and Itthirit Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Itthirit Nice 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 Itthirit Nice will offset losses from the drop in Itthirit Nice's long position.The idea behind Airports of Thailand and Itthirit Nice Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Itthirit Nice vs. Delta Electronics Public | Itthirit Nice vs. Delta Electronics Public | Itthirit Nice vs. Airports of Thailand | Itthirit Nice 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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