Correlation Between Airports and Eastern Technical
Can any of the company-specific risk be diversified away by investing in both Airports and Eastern Technical 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 Eastern Technical 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 Eastern Technical Engineering, you can compare the effects of market volatilities on Airports and Eastern Technical 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 Eastern Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Eastern Technical.
Diversification Opportunities for Airports and Eastern Technical
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Airports and Eastern is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Eastern Technical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Technical 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 Eastern Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Technical has no effect on the direction of Airports i.e., Airports and Eastern Technical go up and down completely randomly.
Pair Corralation between Airports and Eastern Technical
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.69 times more return on investment than Eastern Technical. However, Airports of Thailand is 1.45 times less risky than Eastern Technical. It trades about 0.01 of its potential returns per unit of risk. Eastern Technical Engineering is currently generating about -0.28 per unit of risk. If you would invest 6,150 in Airports of Thailand on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Airports of Thailand or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Eastern Technical Engineering
Performance |
| Timeline |
| Airports of Thailand |
| Eastern Technical |
Airports and Eastern Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Eastern Technical
The main advantage of trading using opposite Airports and Eastern Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Eastern Technical 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 Eastern Technical will offset losses from the drop in Eastern Technical's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Eastern Technical vs. G Capital Public | Eastern Technical vs. Harn Engineering Solutions | Eastern Technical vs. Fortune Parts Industry | Eastern Technical vs. Hydrotek 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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