Correlation Between Airports and Italian Thai
Can any of the company-specific risk be diversified away by investing in both Airports and Italian Thai 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 Italian Thai 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 Italian Thai Development Public, you can compare the effects of market volatilities on Airports and Italian Thai 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 Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Italian Thai.
Diversification Opportunities for Airports and Italian Thai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and Italian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop 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 Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of Airports i.e., Airports and Italian Thai go up and down completely randomly.
Pair Corralation between Airports and Italian Thai
Assuming the 90 days trading horizon Airports is expected to generate 783.75 times less return on investment than Italian Thai. But when comparing it to its historical volatility, Airports of Thailand is 83.45 times less risky than Italian Thai. It trades about 0.01 of its potential returns per unit of risk. Italian Thai Development Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Italian Thai Development Public on September 5, 2024 and sell it today you would lose (16.00) from holding Italian Thai Development Public or give up 23.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Airports of Thailand vs. Italian Thai Development Publi
Performance |
| Timeline |
| Airports of Thailand |
| Italian Thai Develop |
Airports and Italian Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Italian Thai
The main advantage of trading using opposite Airports and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Italian Thai 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 Italian Thai will offset losses from the drop in Italian Thai's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Italian Thai vs. Land and Houses | Italian Thai vs. CH Karnchang Public | Italian Thai vs. Krung Thai Bank | Italian Thai vs. Bangkok Bank 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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