Correlation Between TKS Technologies and Airports
Can any of the company-specific risk be diversified away by investing in both TKS Technologies 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 TKS Technologies and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKS Technologies Public and Airports of Thailand, you can compare the effects of market volatilities on TKS Technologies 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 TKS Technologies with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKS Technologies and Airports.
Diversification Opportunities for TKS Technologies and Airports
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TKS and Airports is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies 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 TKS Technologies 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 TKS Technologies 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 TKS Technologies i.e., TKS Technologies and Airports go up and down completely randomly.
Pair Corralation between TKS Technologies and Airports
Assuming the 90 days trading horizon TKS Technologies Public is expected to under-perform the Airports. But the stock apears to be less risky and, when comparing its historical volatility, TKS Technologies Public is 1.18 times less risky than Airports. The stock trades about -0.3 of its potential returns per unit of risk. The Airports of Thailand is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,175 in Airports of Thailand on August 27, 2024 and sell it today you would lose (25.00) from holding Airports of Thailand or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TKS Technologies Public vs. Airports of Thailand
Performance |
| Timeline |
| TKS Technologies Public |
| Airports of Thailand |
TKS Technologies and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKS Technologies and Airports
The main advantage of trading using opposite TKS Technologies and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKS Technologies 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.| TKS Technologies vs. Tata Steel Public | TKS Technologies vs. Thaifoods Group Public | TKS Technologies vs. TMT Steel Public | TKS Technologies 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 CEOs Directory module to screen CEOs from public companies around the world.
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