Correlation Between Airports and Business Online
Can any of the company-specific risk be diversified away by investing in both Airports and Business Online 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 Business Online 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 Business Online PCL, you can compare the effects of market volatilities on Airports and Business Online 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 Business Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Business Online.
Diversification Opportunities for Airports and Business Online
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airports and Business is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Business Online PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Business Online PCL 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 Business Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Business Online PCL has no effect on the direction of Airports i.e., Airports and Business Online go up and down completely randomly.
Pair Corralation between Airports and Business Online
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.78 times more return on investment than Business Online. However, Airports of Thailand is 1.28 times less risky than Business Online. It trades about -0.01 of its potential returns per unit of risk. Business Online PCL is currently generating about -0.04 per unit of risk. If you would invest 6,150 in Airports of Thailand on August 25, 2024 and sell it today you would lose (25.00) from holding Airports of Thailand or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Business Online PCL
Performance |
| Timeline |
| Airports of Thailand |
| Business Online PCL |
Airports and Business Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Business Online
The main advantage of trading using opposite Airports and Business Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Business Online 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 Business Online will offset losses from the drop in Business Online's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Business Online vs. QTC Energy Public | Business Online vs. Premier Technology Public | Business Online vs. Sea Oil Public | Business Online vs. The Erawan Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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