Correlation Between Airports and SKijchai Enterprise
Can any of the company-specific risk be diversified away by investing in both Airports and SKijchai Enterprise 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 SKijchai Enterprise 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 SKijchai Enterprise Public, you can compare the effects of market volatilities on Airports and SKijchai Enterprise 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 SKijchai Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and SKijchai Enterprise.
Diversification Opportunities for Airports and SKijchai Enterprise
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Airports and SKijchai is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and SKijchai Enterprise Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKijchai Enterprise 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 SKijchai Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKijchai Enterprise has no effect on the direction of Airports i.e., Airports and SKijchai Enterprise go up and down completely randomly.
Pair Corralation between Airports and SKijchai Enterprise
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the SKijchai Enterprise. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 40.18 times less risky than SKijchai Enterprise. The stock trades about -0.03 of its potential returns per unit of risk. The SKijchai Enterprise Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 401.00 in SKijchai Enterprise Public on September 3, 2024 and sell it today you would earn a total of 114.00 from holding SKijchai Enterprise Public or generate 28.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. SKijchai Enterprise Public
Performance |
| Timeline |
| Airports of Thailand |
| SKijchai Enterprise |
Airports and SKijchai Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and SKijchai Enterprise
The main advantage of trading using opposite Airports and SKijchai Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, SKijchai Enterprise 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 SKijchai Enterprise will offset losses from the drop in SKijchai Enterprise'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 CEOs Directory module to screen CEOs from public companies around the world.
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