Correlation Between Central Pattana and Airports
Can any of the company-specific risk be diversified away by investing in both Central Pattana 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 Central Pattana and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Pattana Public and Airports of Thailand, you can compare the effects of market volatilities on Central Pattana 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 Central Pattana with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Airports.
Diversification Opportunities for Central Pattana and Airports
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Airports is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana 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 Central Pattana 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 Central Pattana 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 Central Pattana i.e., Central Pattana and Airports go up and down completely randomly.
Pair Corralation between Central Pattana and Airports
Assuming the 90 days trading horizon Central Pattana is expected to generate 1.02 times less return on investment than Airports. But when comparing it to its historical volatility, Central Pattana Public is 1.01 times less risky than Airports. It trades about 0.06 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,979 in Airports of Thailand on December 1, 2024 and sell it today you would lose (2,279) from holding Airports of Thailand or give up 32.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.71% |
| Values | Daily Returns |
Central Pattana Public vs. Airports of Thailand
Performance |
| Timeline |
| Central Pattana Public |
| Airports of Thailand |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Central Pattana and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Airports
The main advantage of trading using opposite Central Pattana and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana 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.| Central Pattana vs. CP ALL Public | Central Pattana vs. Bangkok Expressway and | Central Pattana vs. The Siam Cement | Central Pattana vs. The Siam Commercial |
| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |