Correlation Between Airports and Yggdrazil Group
Can any of the company-specific risk be diversified away by investing in both Airports and Yggdrazil Group 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 Yggdrazil Group 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 Yggdrazil Group Public, you can compare the effects of market volatilities on Airports and Yggdrazil Group 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 Yggdrazil Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Yggdrazil Group.
Diversification Opportunities for Airports and Yggdrazil Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Airports and Yggdrazil is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Yggdrazil Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yggdrazil Group 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 Yggdrazil Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yggdrazil Group Public has no effect on the direction of Airports i.e., Airports and Yggdrazil Group go up and down completely randomly.
Pair Corralation between Airports and Yggdrazil Group
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.25 times more return on investment than Yggdrazil Group. However, Airports of Thailand is 4.08 times less risky than Yggdrazil Group. It trades about -0.03 of its potential returns per unit of risk. Yggdrazil Group Public is currently generating about -0.21 per unit of risk. If you would invest 6,125 in Airports of Thailand on September 1, 2024 and sell it today you would lose (50.00) from holding Airports of Thailand or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Airports of Thailand vs. Yggdrazil Group Public
Performance |
| Timeline |
| Airports of Thailand |
| Yggdrazil Group Public |
Airports and Yggdrazil Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airports and Yggdrazil Group
The main advantage of trading using opposite Airports and Yggdrazil Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Yggdrazil Group 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 Yggdrazil Group will offset losses from the drop in Yggdrazil Group'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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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