Correlation Between Airports and Bangkok Dusit
Can any of the company-specific risk be diversified away by investing in both Airports and Bangkok Dusit 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 Bangkok Dusit 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 Bangkok Dusit Medical, you can compare the effects of market volatilities on Airports and Bangkok Dusit 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 Bangkok Dusit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Bangkok Dusit.
Diversification Opportunities for Airports and Bangkok Dusit
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and Bangkok is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Bangkok Dusit Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Dusit Medical 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 Bangkok Dusit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Dusit Medical has no effect on the direction of Airports i.e., Airports and Bangkok Dusit go up and down completely randomly.
Pair Corralation between Airports and Bangkok Dusit
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the Bangkok Dusit. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 1.15 times less risky than Bangkok Dusit. The stock trades about -0.03 of its potential returns per unit of risk. The Bangkok Dusit Medical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,671 in Bangkok Dusit Medical on September 2, 2024 and sell it today you would lose (146.00) from holding Bangkok Dusit Medical or give up 5.47% 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. Bangkok Dusit Medical
Performance |
| Timeline |
| Airports of Thailand |
| Bangkok Dusit Medical |
Airports and Bangkok Dusit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Bangkok Dusit
The main advantage of trading using opposite Airports and Bangkok Dusit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Bangkok Dusit 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 Bangkok Dusit will offset losses from the drop in Bangkok Dusit'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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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