Correlation Between Airports and 3BB INTERNET

Can any of the company-specific risk be diversified away by investing in both Airports and 3BB INTERNET 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 3BB INTERNET 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 3BB INTERNET INFRASTRUCTURE, you can compare the effects of market volatilities on Airports and 3BB INTERNET 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 3BB INTERNET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and 3BB INTERNET.

Diversification Opportunities for Airports and 3BB INTERNET

0.54

Correlation Coefficient

Airports  3BB INTERNET

Very weak diversification

The 3 months correlation between Airports and 3BB is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and 3BB INTERNET INFRASTRUCTURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3BB INTERNET INFRAST 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 3BB INTERNET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3BB INTERNET INFRAST has no effect on the direction of Airports i.e., Airports and 3BB INTERNET go up and down completely randomly.

Pair Corralation between Airports and 3BB INTERNET

Assuming the 90 days trading horizon Airports of Thailand is expected to generate 0.79 times more return on investment than 3BB INTERNET. However, Airports of Thailand is 1.26 times less risky than 3BB INTERNET. It trades about -0.02 of its potential returns per unit of risk. 3BB INTERNET INFRASTRUCTURE is currently generating about -0.04 per unit of risk. If you would invest  6,121  in Airports of Thailand on September 12, 2024 and sell it today you would lose (71.00) from holding Airports of Thailand or give up 1.16% of portfolio value over 90 days.

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

Airports of Thailand  vs.  3BB INTERNET INFRASTRUCTURE

Airports of Thailand

Risk-Adjusted Performance

0 of 100

Very Weak

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

3BB INTERNET INFRAST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 3BB INTERNET INFRASTRUCTURE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, 3BB INTERNET is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Airports and 3BB INTERNET

The main advantage of trading using opposite Airports and 3BB INTERNET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, 3BB INTERNET 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 3BB INTERNET will offset losses from the drop in 3BB INTERNET's long position.

The idea behind Airports of Thailand and 3BB INTERNET INFRASTRUCTURE 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.