Correlation Between Airports and Surapon Foods
Can any of the company-specific risk be diversified away by investing in both Airports and Surapon Foods 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 Surapon Foods 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 Surapon Foods Public, you can compare the effects of market volatilities on Airports and Surapon Foods 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 Surapon Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Surapon Foods.
Diversification Opportunities for Airports and Surapon Foods
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Airports and Surapon is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Surapon Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surapon Foods 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 Surapon Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surapon Foods Public has no effect on the direction of Airports i.e., Airports and Surapon Foods go up and down completely randomly.
Pair Corralation between Airports and Surapon Foods
Assuming the 90 days trading horizon Airports is expected to generate 165.51 times less return on investment than Surapon Foods. But when comparing it to its historical volatility, Airports of Thailand is 54.63 times less risky than Surapon Foods. It trades about 0.02 of its potential returns per unit of risk. Surapon Foods Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 739.00 in Surapon Foods Public on September 4, 2024 and sell it today you would lose (59.00) from holding Surapon Foods Public or give up 7.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Surapon Foods Public
Performance |
| Timeline |
| Airports of Thailand |
| Surapon Foods Public |
Airports and Surapon Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Surapon Foods
The main advantage of trading using opposite Airports and Surapon Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Surapon Foods 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 Surapon Foods will offset losses from the drop in Surapon Foods' long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Surapon Foods vs. Airports of Thailand | Surapon Foods vs. PTT Public | Surapon Foods vs. Bangkok Dusit Medical | Surapon Foods vs. Kasikornbank Public |
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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