Correlation Between Airports and Sherwood Public
Can any of the company-specific risk be diversified away by investing in both Airports and Sherwood Public 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 Sherwood Public 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 Sherwood Public, you can compare the effects of market volatilities on Airports and Sherwood Public 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 Sherwood Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Sherwood Public.
Diversification Opportunities for Airports and Sherwood Public
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and Sherwood is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Sherwood Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherwood 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 Sherwood Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherwood Public has no effect on the direction of Airports i.e., Airports and Sherwood Public go up and down completely randomly.
Pair Corralation between Airports and Sherwood Public
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the Sherwood Public. In addition to that, Airports is 1.87 times more volatile than Sherwood Public. It trades about -0.19 of its total potential returns per unit of risk. Sherwood Public is currently generating about -0.19 per unit of volatility. If you would invest 328.00 in Sherwood Public on September 3, 2024 and sell it today you would lose (24.00) from holding Sherwood Public or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Sherwood Public
Performance |
| Timeline |
| Airports of Thailand |
| Sherwood Public |
Airports and Sherwood Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Sherwood Public
The main advantage of trading using opposite Airports and Sherwood Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Sherwood Public 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 Sherwood Public will offset losses from the drop in Sherwood Public's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
| Sherwood Public vs. PTT Public | Sherwood Public vs. The Siam Commercial | Sherwood Public vs. Airports of Thailand | Sherwood Public vs. CP ALL 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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