Correlation Between Airports and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Airports and Thoresen Thai 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 Thoresen Thai 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 Thoresen Thai Agencies, you can compare the effects of market volatilities on Airports and Thoresen Thai 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 Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Thoresen Thai.
Diversification Opportunities for Airports and Thoresen Thai
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Airports and Thoresen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies 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 Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of Airports i.e., Airports and Thoresen Thai go up and down completely randomly.
Pair Corralation between Airports and Thoresen Thai
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.47 times more return on investment than Thoresen Thai. However, Airports of Thailand is 2.14 times less risky than Thoresen Thai. It trades about -0.02 of its potential returns per unit of risk. Thoresen Thai Agencies is currently generating about -0.01 per unit of risk. If you would invest 7,164 in Airports of Thailand on September 13, 2024 and sell it today you would lose (1,014) from holding Airports of Thailand or give up 14.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Thoresen Thai Agencies
Performance |
| Timeline |
| Airports of Thailand |
| Thoresen Thai Agencies |
Airports and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Thoresen Thai
The main advantage of trading using opposite Airports and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Thoresen Thai 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 Thoresen Thai will offset losses from the drop in Thoresen Thai'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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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