Correlation Between Airports and Food Moments
Can any of the company-specific risk be diversified away by investing in both Airports and Food Moments 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 Food Moments 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 Food Moments PCL, you can compare the effects of market volatilities on Airports and Food Moments 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 Food Moments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Food Moments.
Diversification Opportunities for Airports and Food Moments
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and Food is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Food Moments PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Moments 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 Food Moments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Moments PCL has no effect on the direction of Airports i.e., Airports and Food Moments go up and down completely randomly.
Pair Corralation between Airports and Food Moments
Assuming the 90 days trading horizon Airports is expected to generate 13.88 times less return on investment than Food Moments. But when comparing it to its historical volatility, Airports of Thailand is 2.98 times less risky than Food Moments. It trades about 0.0 of its potential returns per unit of risk. Food Moments PCL is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 403.00 in Food Moments PCL on August 29, 2024 and sell it today you would lose (7.00) from holding Food Moments PCL or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 42.79% |
| Values | Daily Returns |
Airports of Thailand vs. Food Moments PCL
Performance |
| Timeline |
| Airports of Thailand |
| Food Moments PCL |
Airports and Food Moments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Food Moments
The main advantage of trading using opposite Airports and Food Moments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Food Moments 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 Food Moments will offset losses from the drop in Food Moments' long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Food Moments vs. Delta Electronics Public | Food Moments vs. Delta Electronics Public | Food Moments vs. Airports of Thailand | Food Moments 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |