Correlation Between Airports and Dynasty Ceramic
Can any of the company-specific risk be diversified away by investing in both Airports and Dynasty Ceramic 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 Dynasty Ceramic 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 Dynasty Ceramic Public, you can compare the effects of market volatilities on Airports and Dynasty Ceramic 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 Dynasty Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Dynasty Ceramic.
Diversification Opportunities for Airports and Dynasty Ceramic
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Airports and Dynasty is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Dynasty Ceramic Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynasty Ceramic 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 Dynasty Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynasty Ceramic Public has no effect on the direction of Airports i.e., Airports and Dynasty Ceramic go up and down completely randomly.
Pair Corralation between Airports and Dynasty Ceramic
Assuming the 90 days trading horizon Airports is expected to generate 9.1 times less return on investment than Dynasty Ceramic. But when comparing it to its historical volatility, Airports of Thailand is 1.5 times less risky than Dynasty Ceramic. It trades about 0.01 of its potential returns per unit of risk. Dynasty Ceramic Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 149.00 in Dynasty Ceramic Public on September 3, 2024 and sell it today you would earn a total of 38.00 from holding Dynasty Ceramic Public or generate 25.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Dynasty Ceramic Public
Performance |
| Timeline |
| Airports of Thailand |
| Dynasty Ceramic Public |
Airports and Dynasty Ceramic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Dynasty Ceramic
The main advantage of trading using opposite Airports and Dynasty Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Dynasty Ceramic 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 Dynasty Ceramic will offset losses from the drop in Dynasty Ceramic's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Dynasty Ceramic vs. Asia Aviation Public | Dynasty Ceramic vs. Bangkok Dusit Medical | Dynasty Ceramic vs. Bangkok Expressway and | Dynasty Ceramic 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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