Correlation Between Airports and Ubis Public
Can any of the company-specific risk be diversified away by investing in both Airports and Ubis Public 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 Ubis Public 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 Ubis Public, you can compare the effects of market volatilities on Airports and Ubis Public 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 Ubis Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Ubis Public.
Diversification Opportunities for Airports and Ubis Public
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Airports and Ubis is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Ubis Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubis 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 Ubis Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubis Public has no effect on the direction of Airports i.e., Airports and Ubis Public go up and down completely randomly.
Pair Corralation between Airports and Ubis Public
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the Ubis Public. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 40.18 times less risky than Ubis Public. The stock trades about -0.03 of its potential returns per unit of risk. The Ubis Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 370.00 in Ubis Public on August 29, 2024 and sell it today you would lose (204.00) from holding Ubis Public or give up 55.14% 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. Ubis Public
Performance |
| Timeline |
| Airports of Thailand |
| Ubis Public |
Airports and Ubis Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Ubis Public
The main advantage of trading using opposite Airports and Ubis Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Ubis Public 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 Ubis Public will offset losses from the drop in Ubis Public'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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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