Correlation Between Airports and Tanachira Retail
Can any of the company-specific risk be diversified away by investing in both Airports and Tanachira Retail 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 Tanachira Retail 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 Tanachira Retail, you can compare the effects of market volatilities on Airports and Tanachira Retail 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 Tanachira Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Tanachira Retail.
Diversification Opportunities for Airports and Tanachira Retail
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and Tanachira is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Tanachira Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanachira Retail 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 Tanachira Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanachira Retail has no effect on the direction of Airports i.e., Airports and Tanachira Retail go up and down completely randomly.
Pair Corralation between Airports and Tanachira Retail
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.3 times more return on investment than Tanachira Retail. However, Airports of Thailand is 3.31 times less risky than Tanachira Retail. It trades about 0.18 of its potential returns per unit of risk. Tanachira Retail is currently generating about -0.07 per unit of risk. If you would invest 5,899 in Airports of Thailand on September 14, 2024 and sell it today you would earn a total of 251.00 from holding Airports of Thailand or generate 4.25% 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. Tanachira Retail
Performance |
| Timeline |
| Airports of Thailand |
| Tanachira Retail |
Airports and Tanachira Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Tanachira Retail
The main advantage of trading using opposite Airports and Tanachira Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Tanachira Retail 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 Tanachira Retail will offset losses from the drop in Tanachira Retail's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Tanachira Retail vs. Delta Electronics Public | Tanachira Retail vs. Delta Electronics Public | Tanachira Retail vs. Airports of Thailand | Tanachira Retail vs. Airports of Thailand |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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