Correlation Between Airports and LH Hotel
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By analyzing existing cross correlation between Airports of Thailand and LH Hotel Leasehold, you can compare the effects of market volatilities on Airports and LH Hotel 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 LH Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and LH Hotel.
Diversification Opportunities for Airports and LH Hotel
Poor diversification
The 3 months correlation between Airports and LHHOTEL is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and LH Hotel Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LH Hotel Leasehold 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 LH Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LH Hotel Leasehold has no effect on the direction of Airports i.e., Airports and LH Hotel go up and down completely randomly.
Pair Corralation between Airports and LH Hotel
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the LH Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 1.08 times less risky than LH Hotel. The stock trades about -0.03 of its potential returns per unit of risk. The LH Hotel Leasehold is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,290 in LH Hotel Leasehold on August 29, 2024 and sell it today you would earn a total of 50.00 from holding LH Hotel Leasehold or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. LH Hotel Leasehold
Performance |
| Timeline |
| Airports of Thailand |
| LH Hotel Leasehold |
Airports and LH Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and LH Hotel
The main advantage of trading using opposite Airports and LH Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, LH Hotel 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 LH Hotel will offset losses from the drop in LH Hotel's long position.| Airports vs. Tata Steel Public | Airports vs. Thaifoods Group Public | Airports vs. TMT Steel Public | Airports vs. The Erawan Group |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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