Correlation Between Airports and Ichitan Group
Can any of the company-specific risk be diversified away by investing in both Airports and Ichitan Group 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 Ichitan Group 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 Ichitan Group Public, you can compare the effects of market volatilities on Airports and Ichitan Group 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 Ichitan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Ichitan Group.
Diversification Opportunities for Airports and Ichitan Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Airports and Ichitan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Ichitan Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichitan Group 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 Ichitan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichitan Group Public has no effect on the direction of Airports i.e., Airports and Ichitan Group go up and down completely randomly.
Pair Corralation between Airports and Ichitan Group
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the Ichitan Group. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 70.76 times less risky than Ichitan Group. The stock trades about -0.04 of its potential returns per unit of risk. The Ichitan Group Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,144 in Ichitan Group Public on September 21, 2024 and sell it today you would earn a total of 276.00 from holding Ichitan Group Public or generate 24.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Ichitan Group Public
Performance |
| Timeline |
| Airports of Thailand |
| Ichitan Group Public |
Airports and Ichitan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Ichitan Group
The main advantage of trading using opposite Airports and Ichitan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Ichitan Group 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 Ichitan Group will offset losses from the drop in Ichitan Group'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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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