Correlation Between Airports and AIM Commercial
Can any of the company-specific risk be diversified away by investing in both Airports and AIM Commercial 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 AIM Commercial 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 AIM Commercial Growth, you can compare the effects of market volatilities on Airports and AIM Commercial 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 AIM Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and AIM Commercial.
Diversification Opportunities for Airports and AIM Commercial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and AIM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and AIM Commercial Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM Commercial Growth 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 AIM Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM Commercial Growth has no effect on the direction of Airports i.e., Airports and AIM Commercial go up and down completely randomly.
Pair Corralation between Airports and AIM Commercial
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the AIM Commercial. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 1.35 times less risky than AIM Commercial. The stock trades about -0.04 of its potential returns per unit of risk. The AIM Commercial Growth is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 277.00 in AIM Commercial Growth on September 3, 2024 and sell it today you would earn a total of 29.00 from holding AIM Commercial Growth or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. AIM Commercial Growth
Performance |
| Timeline |
| Airports of Thailand |
| AIM Commercial Growth |
Airports and AIM Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and AIM Commercial
The main advantage of trading using opposite Airports and AIM Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, AIM Commercial 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 AIM Commercial will offset losses from the drop in AIM Commercial's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| AIM Commercial vs. Delta Electronics Public | AIM Commercial vs. Delta Electronics Public | AIM Commercial vs. Airports of Thailand | AIM Commercial 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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