Correlation Between ARIP Public and Airports
Can any of the company-specific risk be diversified away by investing in both ARIP Public and Airports 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 ARIP Public and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARIP Public and Airports of Thailand, you can compare the effects of market volatilities on ARIP Public and Airports 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 ARIP Public with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARIP Public and Airports.
Diversification Opportunities for ARIP Public and Airports
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ARIP and Airports is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ARIP Public and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and ARIP 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 ARIP Public are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of ARIP Public i.e., ARIP Public and Airports go up and down completely randomly.
Pair Corralation between ARIP Public and Airports
Assuming the 90 days trading horizon ARIP Public is expected to generate 57.78 times more return on investment than Airports. However, ARIP Public is 57.78 times more volatile than Airports of Thailand. It trades about 0.06 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.0 per unit of risk. If you would invest 79.00 in ARIP Public on August 25, 2024 and sell it today you would lose (19.00) from holding ARIP Public or give up 24.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARIP Public vs. Airports of Thailand
Performance |
| Timeline |
| ARIP Public |
| Airports of Thailand |
ARIP Public and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARIP Public and Airports
The main advantage of trading using opposite ARIP Public and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARIP Public position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| ARIP Public vs. QTC Energy Public | ARIP Public vs. Premier Technology Public | ARIP Public vs. Sea Oil Public | ARIP Public vs. The Erawan Group |
| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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