Correlation Between Airports and QTC Energy
Can any of the company-specific risk be diversified away by investing in both Airports and QTC Energy 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 QTC Energy 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 QTC Energy Public, you can compare the effects of market volatilities on Airports and QTC Energy 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 QTC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and QTC Energy.
Diversification Opportunities for Airports and QTC Energy
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and QTC is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and QTC Energy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QTC Energy 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 QTC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QTC Energy Public has no effect on the direction of Airports i.e., Airports and QTC Energy go up and down completely randomly.
Pair Corralation between Airports and QTC Energy
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the QTC Energy. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 1.04 times less risky than QTC Energy. The stock trades about -0.02 of its potential returns per unit of risk. The QTC Energy Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 380.00 in QTC Energy Public on August 29, 2024 and sell it today you would earn a total of 4.00 from holding QTC Energy Public or generate 1.05% 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. QTC Energy Public
Performance |
| Timeline |
| Airports of Thailand |
| QTC Energy Public |
Airports and QTC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and QTC Energy
The main advantage of trading using opposite Airports and QTC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, QTC Energy 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 QTC Energy will offset losses from the drop in QTC Energy'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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