Correlation Between Airports and Premier Technology
Can any of the company-specific risk be diversified away by investing in both Airports and Premier Technology 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 Premier Technology 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 Premier Technology Public, you can compare the effects of market volatilities on Airports and Premier Technology 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 Premier Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Premier Technology.
Diversification Opportunities for Airports and Premier Technology
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and Premier is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Premier Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Technology 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 Premier Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Technology Public has no effect on the direction of Airports i.e., Airports and Premier Technology go up and down completely randomly.
Pair Corralation between Airports and Premier Technology
Assuming the 90 days trading horizon Airports is expected to generate 153.61 times less return on investment than Premier Technology. But when comparing it to its historical volatility, Airports of Thailand is 54.06 times less risky than Premier Technology. It trades about 0.02 of its potential returns per unit of risk. Premier Technology Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 748.00 in Premier Technology Public on August 25, 2024 and sell it today you would earn a total of 232.00 from holding Premier Technology Public or generate 31.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Premier Technology Public
Performance |
| Timeline |
| Airports of Thailand |
| Premier Technology Public |
Airports and Premier Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Premier Technology
The main advantage of trading using opposite Airports and Premier Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Premier Technology 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 Premier Technology will offset losses from the drop in Premier Technology's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Premier Technology vs. AP Public | Premier Technology vs. Jasmine International Public | Premier Technology vs. Asia Plus Group | Premier Technology vs. Bangkok Aviation Fuel |
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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