Correlation Between Banpu Public and Asia Aviation
Can any of the company-specific risk be diversified away by investing in both Banpu Public and Asia 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 Banpu Public and Asia Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banpu Public and Asia Aviation Public, you can compare the effects of market volatilities on Banpu Public and Asia 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 Banpu Public with a short position of Asia Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banpu Public and Asia Aviation.
Diversification Opportunities for Banpu Public and Asia Aviation
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Banpu and Asia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Banpu Public and Asia Aviation Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Aviation Public and Banpu 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 Banpu Public are associated (or correlated) with Asia Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Aviation Public has no effect on the direction of Banpu Public i.e., Banpu Public and Asia Aviation go up and down completely randomly.
Pair Corralation between Banpu Public and Asia Aviation
Assuming the 90 days trading horizon Banpu Public is expected to under-perform the Asia Aviation. In addition to that, Banpu Public is 1.07 times more volatile than Asia Aviation Public. It trades about -0.19 of its total potential returns per unit of risk. Asia Aviation Public is currently generating about 0.03 per unit of volatility. If you would invest 276.00 in Asia Aviation Public on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Asia Aviation Public or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banpu Public vs. Asia Aviation Public
Performance |
| Timeline |
| Banpu Public |
| Asia Aviation Public |
Banpu Public and Asia Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banpu Public and Asia Aviation
The main advantage of trading using opposite Banpu Public and Asia Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banpu Public position performs unexpectedly, Asia 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 Asia Aviation will offset losses from the drop in Asia Aviation's long position.| Banpu Public vs. PTT Public | Banpu Public vs. PTT Exploration and | Banpu Public vs. Bangkok Bank Public | Banpu Public vs. Thai Oil Public |
| Asia Aviation vs. MCS Steel Public | Asia Aviation vs. Asia Plus Group | Asia Aviation vs. Lalin Property Public | Asia Aviation vs. Lam Soon Public |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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