Correlation Between Airports and Tipco Asphalt
Can any of the company-specific risk be diversified away by investing in both Airports and Tipco Asphalt 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 Tipco Asphalt 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 Tipco Asphalt Public, you can compare the effects of market volatilities on Airports and Tipco Asphalt 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 Tipco Asphalt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and Tipco Asphalt.
Diversification Opportunities for Airports and Tipco Asphalt
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Airports and Tipco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and Tipco Asphalt Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tipco Asphalt 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 Tipco Asphalt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tipco Asphalt Public has no effect on the direction of Airports i.e., Airports and Tipco Asphalt go up and down completely randomly.
Pair Corralation between Airports and Tipco Asphalt
Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the Tipco Asphalt. In addition to that, Airports is 1.51 times more volatile than Tipco Asphalt Public. It trades about -0.23 of its total potential returns per unit of risk. Tipco Asphalt Public is currently generating about -0.18 per unit of volatility. If you would invest 1,990 in Tipco Asphalt Public on December 2, 2024 and sell it today you would lose (330.00) from holding Tipco Asphalt Public or give up 16.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Airports of Thailand vs. Tipco Asphalt Public
Performance |
Timeline |
Airports of Thailand |
Tipco Asphalt Public |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Airports and Tipco Asphalt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Airports and Tipco Asphalt
The main advantage of trading using opposite Airports and Tipco Asphalt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, Tipco Asphalt 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 Tipco Asphalt will offset losses from the drop in Tipco Asphalt's long position.Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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