Correlation Between Airports and AAPICO Hitech
Can any of the company-specific risk be diversified away by investing in both Airports and AAPICO Hitech 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 AAPICO Hitech 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 AAPICO Hitech Public, you can compare the effects of market volatilities on Airports and AAPICO Hitech 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 AAPICO Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and AAPICO Hitech.
Diversification Opportunities for Airports and AAPICO Hitech
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and AAPICO is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and AAPICO Hitech Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAPICO Hitech 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 AAPICO Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAPICO Hitech Public has no effect on the direction of Airports i.e., Airports and AAPICO Hitech go up and down completely randomly.
Pair Corralation between Airports and AAPICO Hitech
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.53 times more return on investment than AAPICO Hitech. However, Airports of Thailand is 1.89 times less risky than AAPICO Hitech. It trades about -0.03 of its potential returns per unit of risk. AAPICO Hitech Public is currently generating about -0.06 per unit of risk. If you would invest 7,132 in Airports of Thailand on September 4, 2024 and sell it today you would lose (957.00) from holding Airports of Thailand or give up 13.42% 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. AAPICO Hitech Public
Performance |
| Timeline |
| Airports of Thailand |
| AAPICO Hitech Public |
Airports and AAPICO Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and AAPICO Hitech
The main advantage of trading using opposite Airports and AAPICO Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, AAPICO Hitech 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 AAPICO Hitech will offset losses from the drop in AAPICO Hitech's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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