Correlation Between Airports and PTT Public

Can any of the company-specific risk be diversified away by investing in both Airports and PTT Public 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 Airports and PTT Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Airports of Thailand and PTT Public, you can compare the effects of market volatilities on Airports and PTT Public 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 Airports with a short position of PTT Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and PTT Public.

Diversification Opportunities for Airports and PTT Public

0.1

Correlation Coefficient

Airports  PTT Public

Average diversification

The 3 months correlation between Airports and PTT is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and PTT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Public and Airports 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 Airports of Thailand are associated (or correlated) with PTT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Public has no effect on the direction of Airports i.e., Airports and PTT Public go up and down completely randomly.

Pair Corralation between Airports and PTT Public

Assuming the 90 days trading horizon Airports of Thailand is expected to generate 157.01 times more return on investment than PTT Public. However, Airports is 157.01 times more volatile than PTT Public. It trades about 0.17 of its potential returns per unit of risk. PTT Public is currently generating about -0.04 per unit of risk. If you would invest  0.00  in Airports of Thailand on September 3, 2024 and sell it today you would earn a total of  6,075  from holding Airports of Thailand or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Airports of Thailand  vs.  PTT Public

Airports of Thailand

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Airports of Thailand are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Airports sustained solid returns over the last few months and may actually be approaching a breakup point.

PTT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, PTT Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Airports and PTT Public

The main advantage of trading using opposite Airports and PTT Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, PTT Public 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 PTT Public will offset losses from the drop in PTT Public's long position.

The idea behind Airports of Thailand and PTT Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.