Correlation Between Airports and Selic Corp
Can any of the company-specific risk be diversified away by investing in both Airports and Selic Corp 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 Selic Corp 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 Selic Corp Public, you can compare the effects of market volatilities on Airports and Selic Corp 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 Selic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Selic Corp.
Diversification Opportunities for Airports and Selic Corp
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airports and Selic is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Selic Corp Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selic Corp 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 Selic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selic Corp Public has no effect on the direction of Airports i.e., Airports and Selic Corp go up and down completely randomly.
Pair Corralation between Airports and Selic Corp
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 1.41 times more return on investment than Selic Corp. However, Airports is 1.41 times more volatile than Selic Corp Public. It trades about 0.06 of its potential returns per unit of risk. Selic Corp Public is currently generating about 0.04 per unit of risk. If you would invest 7,316 in Airports of Thailand on September 12, 2024 and sell it today you would lose (1,266) from holding Airports of Thailand or give up 17.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Airports of Thailand vs. Selic Corp Public
Performance |
| Timeline |
| Airports of Thailand |
| Selic Corp Public |
Airports and Selic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Selic Corp
The main advantage of trading using opposite Airports and Selic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Selic Corp 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 Selic Corp will offset losses from the drop in Selic Corp's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| Selic Corp vs. Sri Trang Agro Industry | Selic Corp vs. Jay Mart Public | Selic Corp vs. Com7 PCL | Selic Corp vs. Energy Absolute 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |