Correlation Between Airports and TKrungthai Industries
Can any of the company-specific risk be diversified away by investing in both Airports and TKrungthai Industries 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 TKrungthai Industries 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 TKrungthai Industries Public, you can compare the effects of market volatilities on Airports and TKrungthai Industries 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 TKrungthai Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and TKrungthai Industries.
Diversification Opportunities for Airports and TKrungthai Industries
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and TKrungthai is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and TKrungthai Industries Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKrungthai Industries 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 TKrungthai Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKrungthai Industries has no effect on the direction of Airports i.e., Airports and TKrungthai Industries go up and down completely randomly.
Pair Corralation between Airports and TKrungthai Industries
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the TKrungthai Industries. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 1.82 times less risky than TKrungthai Industries. The stock trades about -0.02 of its potential returns per unit of risk. The TKrungthai Industries Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 163.00 in TKrungthai Industries Public on September 4, 2024 and sell it today you would earn a total of 0.00 from holding TKrungthai Industries Public or generate 0.0% 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. TKrungthai Industries Public
Performance |
| Timeline |
| Airports of Thailand |
| TKrungthai Industries |
Airports and TKrungthai Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and TKrungthai Industries
The main advantage of trading using opposite Airports and TKrungthai Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, TKrungthai Industries 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 TKrungthai Industries will offset losses from the drop in TKrungthai Industries' long position.| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
| TKrungthai Industries vs. Central Pattana Public | TKrungthai Industries vs. CP ALL Public | TKrungthai Industries vs. Bangkok Dusit Medical | TKrungthai Industries 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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