Correlation Between Airports and Asia Fiber
Can any of the company-specific risk be diversified away by investing in both Airports and Asia Fiber 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 Asia Fiber 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 Asia Fiber Public, you can compare the effects of market volatilities on Airports and Asia Fiber 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 Asia Fiber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Asia Fiber.
Diversification Opportunities for Airports and Asia Fiber
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and Asia is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Asia Fiber Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Fiber 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 Asia Fiber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Fiber Public has no effect on the direction of Airports i.e., Airports and Asia Fiber go up and down completely randomly.
Pair Corralation between Airports and Asia Fiber
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.81 times more return on investment than Asia Fiber. However, Airports of Thailand is 1.24 times less risky than Asia Fiber. It trades about -0.09 of its potential returns per unit of risk. Asia Fiber Public is currently generating about -0.27 per unit of risk. If you would invest 6,225 in Airports of Thailand on September 3, 2024 and sell it today you would lose (150.00) from holding Airports of Thailand or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Airports of Thailand vs. Asia Fiber Public
Performance |
| Timeline |
| Airports of Thailand |
| Asia Fiber Public |
Airports and Asia Fiber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Asia Fiber
The main advantage of trading using opposite Airports and Asia Fiber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Asia Fiber 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 Asia Fiber will offset losses from the drop in Asia Fiber's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Asia Fiber vs. Central Pattana Public | Asia Fiber vs. CP ALL Public | Asia Fiber vs. Bangkok Dusit Medical | Asia Fiber 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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