Correlation Between Airports and Haad Thip
Can any of the company-specific risk be diversified away by investing in both Airports and Haad Thip 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 Haad Thip 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 Haad Thip Public, you can compare the effects of market volatilities on Airports and Haad Thip 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 Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Haad Thip.
Diversification Opportunities for Airports and Haad Thip
Average diversification
The 3 months correlation between Airports and Haad is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip 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 Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Airports i.e., Airports and Haad Thip go up and down completely randomly.
Pair Corralation between Airports and Haad Thip
Assuming the 90 days trading horizon Airports is expected to generate 1.91 times less return on investment than Haad Thip. But when comparing it to its historical volatility, Airports of Thailand is 1.13 times less risky than Haad Thip. It trades about 0.02 of its potential returns per unit of risk. Haad Thip Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,463 in Haad Thip Public on September 4, 2024 and sell it today you would earn a total of 137.00 from holding Haad Thip Public or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Haad Thip Public
Performance |
| Timeline |
| Airports of Thailand |
| Haad Thip Public |
Airports and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Haad Thip
The main advantage of trading using opposite Airports and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Haad Thip 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 Haad Thip will offset losses from the drop in Haad Thip's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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