Correlation Between Airports and After You

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

Diversification Opportunities for Airports and After You

-0.12

Correlation Coefficient

Airports  After You

Good diversification

The 3 months correlation between Airports and After is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and After You Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on After You 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 After You. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of After You Public has no effect on the direction of Airports i.e., Airports and After You go up and down completely randomly.

Pair Corralation between Airports and After You

Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the After You. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 1.51 times less risky than After You. The stock trades about -0.01 of its potential returns per unit of risk. The After You Public is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  920.00  in After You Public on September 5, 2024 and sell it today you would earn a total of  170.00  from holding After You Public or generate 18.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Airports of Thailand  vs.  After You Public

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.

After You Public

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in After You Public are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, After You disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airports and After You

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

The idea behind Airports of Thailand and After You 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.