Correlation Between Airports and BJC Heavy
Can any of the company-specific risk be diversified away by investing in both Airports and BJC Heavy 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 BJC Heavy 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 BJC Heavy Industries, you can compare the effects of market volatilities on Airports and BJC Heavy 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 BJC Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and BJC Heavy.
Diversification Opportunities for Airports and BJC Heavy
Weak diversification
The 3 months correlation between Airports and BJC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and BJC Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJC Heavy Industries 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 BJC Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJC Heavy Industries has no effect on the direction of Airports i.e., Airports and BJC Heavy go up and down completely randomly.
Pair Corralation between Airports and BJC Heavy
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the BJC Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 40.17 times less risky than BJC Heavy. The stock trades about -0.03 of its potential returns per unit of risk. The BJC Heavy Industries is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 153.00 in BJC Heavy Industries on September 3, 2024 and sell it today you would lose (31.00) from holding BJC Heavy Industries or give up 20.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. BJC Heavy Industries
Performance |
| Timeline |
| Airports of Thailand |
| BJC Heavy Industries |
Airports and BJC Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and BJC Heavy
The main advantage of trading using opposite Airports and BJC Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, BJC Heavy 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 BJC Heavy will offset losses from the drop in BJC Heavy's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| BJC Heavy vs. Asia Aviation Public | BJC Heavy vs. Bangkok Dusit Medical | BJC Heavy vs. Bangkok Expressway and | BJC Heavy 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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