Correlation Between Airports and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Airports and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Airports and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Dow Jones.
Diversification Opportunities for Airports and Dow Jones
Pay attention - limited upside
The 3 months correlation between Airports and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Airports i.e., Airports and Dow Jones go up and down completely randomly.
Pair Corralation between Airports and Dow Jones
Assuming the 90 days horizon Airports of Thailand is expected to generate 13.14 times more return on investment than Dow Jones. However, Airports is 13.14 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 150.00 in Airports of Thailand on August 29, 2024 and sell it today you would lose (25.00) from holding Airports of Thailand or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airports of Thailand vs. Dow Jones Industrial
Performance |
| Timeline |
Airports and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Airports of Thailand
Pair trading matchups for Airports
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Airports and Dow Jones
The main advantage of trading using opposite Airports and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Airports vs. Aeroports de Paris | Airports vs. Corporacion America Airports | Airports vs. Grupo Aeroportuario del | Airports vs. Grupo Aeroportuario del |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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