Correlation Between Airports and HEMARAJ INDUSTRIAL

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

Diversification Opportunities for Airports and HEMARAJ INDUSTRIAL

-0.06

Correlation Coefficient

Airports  HEMARAJ INDUSTRIAL

Good diversification

The 3 months correlation between Airports and HEMARAJ is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and HEMARAJ INDUSTRIAL PROPERTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMARAJ INDUSTRIAL 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 HEMARAJ INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMARAJ INDUSTRIAL has no effect on the direction of Airports i.e., Airports and HEMARAJ INDUSTRIAL go up and down completely randomly.

Pair Corralation between Airports and HEMARAJ INDUSTRIAL

Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the HEMARAJ INDUSTRIAL. But the stock apears to be less risky and, when comparing its historical volatility, Airports of Thailand is 161.89 times less risky than HEMARAJ INDUSTRIAL. The stock trades about -0.09 of its potential returns per unit of risk. The HEMARAJ INDUSTRIAL PROPERTY is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  494.00  in HEMARAJ INDUSTRIAL PROPERTY on October 11, 2024 and sell it today you would earn a total of  4.00  from holding HEMARAJ INDUSTRIAL PROPERTY or generate 0.81% return on investment over 90 days.

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

Airports of Thailand  vs.  HEMARAJ INDUSTRIAL PROPERTY

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 latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

HEMARAJ INDUSTRIAL

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HEMARAJ INDUSTRIAL PROPERTY are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, HEMARAJ INDUSTRIAL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Airports and HEMARAJ INDUSTRIAL

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

The idea behind Airports of Thailand and HEMARAJ INDUSTRIAL PROPERTY 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.