Correlation Between Airports and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both Airports and Delta Electronics 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 Delta Electronics 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 Delta Electronics Public, you can compare the effects of market volatilities on Airports and Delta Electronics 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 Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Delta Electronics.
Diversification Opportunities for Airports and Delta Electronics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and Delta is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics 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 Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of Airports i.e., Airports and Delta Electronics go up and down completely randomly.
Pair Corralation between Airports and Delta Electronics
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.41 times more return on investment than Delta Electronics. However, Airports of Thailand is 2.45 times less risky than Delta Electronics. It trades about -0.25 of its potential returns per unit of risk. Delta Electronics Public is currently generating about -0.12 per unit of risk. If you would invest 5,975 in Airports of Thailand on November 2, 2024 and sell it today you would lose (350.00) from holding Airports of Thailand or give up 5.86% 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. Delta Electronics Public
Performance |
| Timeline |
| Airports of Thailand |
| Delta Electronics Public |
Airports and Delta Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Delta Electronics
The main advantage of trading using opposite Airports and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Delta Electronics 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 Delta Electronics will offset losses from the drop in Delta Electronics' long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Delta Electronics vs. Airports of Thailand | Delta Electronics vs. Hana Microelectronics Public | Delta Electronics vs. Advanced Info Service | Delta Electronics vs. Kasikornbank Public |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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