Correlation Between Airports and AddTech Hub
Can any of the company-specific risk be diversified away by investing in both Airports and AddTech Hub 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 AddTech Hub 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 AddTech Hub Public, you can compare the effects of market volatilities on Airports and AddTech Hub 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 AddTech Hub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and AddTech Hub.
Diversification Opportunities for Airports and AddTech Hub
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Airports and AddTech is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and AddTech Hub Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AddTech Hub 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 AddTech Hub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AddTech Hub Public has no effect on the direction of Airports i.e., Airports and AddTech Hub go up and down completely randomly.
Pair Corralation between Airports and AddTech Hub
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the AddTech Hub. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 1.83 times less risky than AddTech Hub. The stock trades about -0.03 of its potential returns per unit of risk. The AddTech Hub Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 464.00 in AddTech Hub Public on September 1, 2024 and sell it today you would lose (2.00) from holding AddTech Hub Public or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. AddTech Hub Public
Performance |
| Timeline |
| Airports of Thailand |
| AddTech Hub Public |
Airports and AddTech Hub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and AddTech Hub
The main advantage of trading using opposite Airports and AddTech Hub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, AddTech Hub 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 AddTech Hub will offset losses from the drop in AddTech Hub's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| AddTech Hub vs. Forth Public | AddTech Hub vs. II Group Public | AddTech Hub vs. After You Public | AddTech Hub vs. Applicad 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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