Correlation Between AP Public and Bangkok Aviation
Can any of the company-specific risk be diversified away by investing in both AP Public and Bangkok Aviation 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 AP Public and Bangkok Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and Bangkok Aviation Fuel, you can compare the effects of market volatilities on AP Public and Bangkok Aviation 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 AP Public with a short position of Bangkok Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and Bangkok Aviation.
Diversification Opportunities for AP Public and Bangkok Aviation
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AP Public and Bangkok is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and Bangkok Aviation Fuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Aviation Fuel and AP Public 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 AP Public are associated (or correlated) with Bangkok Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Aviation Fuel has no effect on the direction of AP Public i.e., AP Public and Bangkok Aviation go up and down completely randomly.
Pair Corralation between AP Public and Bangkok Aviation
Assuming the 90 days horizon AP Public is expected to generate 0.75 times more return on investment than Bangkok Aviation. However, AP Public is 1.33 times less risky than Bangkok Aviation. It trades about -0.19 of its potential returns per unit of risk. Bangkok Aviation Fuel is currently generating about -0.28 per unit of risk. If you would invest 935.00 in AP Public on August 29, 2024 and sell it today you would lose (65.00) from holding AP Public or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Public vs. Bangkok Aviation Fuel
Performance |
| Timeline |
| AP Public |
| Bangkok Aviation Fuel |
AP Public and Bangkok Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and Bangkok Aviation
The main advantage of trading using opposite AP Public and Bangkok Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, Bangkok Aviation 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 Bangkok Aviation will offset losses from the drop in Bangkok Aviation's long position.| AP Public vs. Land and Houses | AP Public vs. Quality Houses Public | AP Public vs. Bangkok Bank Public | AP Public vs. Siri Prime Office |
| Bangkok Aviation vs. Tata Steel Public | Bangkok Aviation vs. Thaifoods Group Public | Bangkok Aviation vs. TMT Steel Public | Bangkok Aviation vs. The Erawan Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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