Correlation Between Airports and MAGURO GROUP
Can any of the company-specific risk be diversified away by investing in both Airports and MAGURO 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 MAGURO 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 MAGURO GROUP PUBLIC, you can compare the effects of market volatilities on Airports and MAGURO 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 MAGURO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and MAGURO GROUP.
Diversification Opportunities for Airports and MAGURO GROUP
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Airports and MAGURO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and MAGURO GROUP PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGURO 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 MAGURO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGURO GROUP PUBLIC has no effect on the direction of Airports i.e., Airports and MAGURO GROUP go up and down completely randomly.
Pair Corralation between Airports and MAGURO GROUP
Assuming the 90 days trading horizon Airports is expected to generate 14.72 times less return on investment than MAGURO GROUP. But when comparing it to its historical volatility, Airports of Thailand is 3.12 times less risky than MAGURO GROUP. It trades about 0.02 of its potential returns per unit of risk. MAGURO GROUP PUBLIC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,700 in MAGURO GROUP PUBLIC on September 2, 2024 and sell it today you would earn a total of 370.00 from holding MAGURO GROUP PUBLIC or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Airports of Thailand vs. MAGURO GROUP PUBLIC
Performance |
| Timeline |
| Airports of Thailand |
| MAGURO GROUP PUBLIC |
Airports and MAGURO GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and MAGURO GROUP
The main advantage of trading using opposite Airports and MAGURO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, MAGURO 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 MAGURO GROUP will offset losses from the drop in MAGURO 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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