Correlation Between Central Retail and BA Airport
Can any of the company-specific risk be diversified away by investing in both Central Retail and BA Airport 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 Retail and BA Airport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Retail and BA Airport Leasehold, you can compare the effects of market volatilities on Central Retail and BA Airport 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 Retail with a short position of BA Airport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Retail and BA Airport.
Diversification Opportunities for Central Retail and BA Airport
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Central and BAREIT is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Central Retail and BA Airport Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BA Airport Leasehold and Central Retail 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 Retail are associated (or correlated) with BA Airport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BA Airport Leasehold has no effect on the direction of Central Retail i.e., Central Retail and BA Airport go up and down completely randomly.
Pair Corralation between Central Retail and BA Airport
Assuming the 90 days trading horizon Central Retail is expected to generate 2.5 times more return on investment than BA Airport. However, Central Retail is 2.5 times more volatile than BA Airport Leasehold. It trades about 0.24 of its potential returns per unit of risk. BA Airport Leasehold is currently generating about 0.04 per unit of risk. If you would invest 3,125 in Central Retail on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Central Retail or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Retail vs. BA Airport Leasehold
Performance |
| Timeline |
| Central Retail |
| BA Airport Leasehold |
Central Retail and BA Airport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Retail and BA Airport
The main advantage of trading using opposite Central Retail and BA Airport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Retail position performs unexpectedly, BA Airport 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 BA Airport will offset losses from the drop in BA Airport's long position.| Central Retail vs. Interlink Communication Public | Central Retail vs. Nonthavej Hospital Public | Central Retail vs. Rajthanee Hospital Public | Central Retail vs. Information and Communication |
| BA Airport vs. Premier Technology Public | BA Airport vs. Lohakit Metal Public | BA Airport vs. Taokaenoi Food Marketing | BA Airport vs. AIM Industrial Growth |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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