Correlation Between Airports and Thai Coating
Can any of the company-specific risk be diversified away by investing in both Airports and Thai Coating 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 Thai Coating 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 Thai Coating Industrial, you can compare the effects of market volatilities on Airports and Thai Coating 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 Thai Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Thai Coating.
Diversification Opportunities for Airports and Thai Coating
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Airports and Thai is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Thai Coating Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Coating Industrial 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 Thai Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Coating Industrial has no effect on the direction of Airports i.e., Airports and Thai Coating go up and down completely randomly.
Pair Corralation between Airports and Thai Coating
Assuming the 90 days trading horizon Airports is expected to generate 2.82 times less return on investment than Thai Coating. But when comparing it to its historical volatility, Airports of Thailand is 6.88 times less risky than Thai Coating. It trades about 0.04 of its potential returns per unit of risk. Thai Coating Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,525 in Thai Coating Industrial on September 12, 2024 and sell it today you would lose (85.00) from holding Thai Coating Industrial or give up 3.37% 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. Thai Coating Industrial
Performance |
| Timeline |
| Airports of Thailand |
| Thai Coating Industrial |
Airports and Thai Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Thai Coating
The main advantage of trading using opposite Airports and Thai Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Thai Coating 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 Thai Coating will offset losses from the drop in Thai Coating's long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| Thai Coating vs. Thantawan Industry Public | Thai Coating vs. The Erawan Group | Thai Coating vs. Jay Mart Public | Thai Coating 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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