Correlation Between Airports and TKS Technologies

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

Diversification Opportunities for Airports and TKS Technologies

0.59

Correlation Coefficient

Airports  TKS Technologies

Very weak diversification

The 3 months correlation between Airports and TKS is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and TKS Technologies Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKS Technologies 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 TKS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKS Technologies Public has no effect on the direction of Airports i.e., Airports and TKS Technologies go up and down completely randomly.

Pair Corralation between Airports and TKS Technologies

Assuming the 90 days trading horizon Airports of Thailand is expected to under-perform the TKS Technologies. In addition to that, Airports is 1.51 times more volatile than TKS Technologies Public. It trades about -0.23 of its total potential returns per unit of risk. TKS Technologies Public is currently generating about -0.14 per unit of volatility. If you would invest  655.00  in TKS Technologies Public on December 2, 2024 and sell it today you would lose (85.00) from holding TKS Technologies Public or give up 12.98% 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.  TKS Technologies Public

Airports of Thailand

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

TKS Technologies Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days TKS Technologies Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Airports and TKS Technologies

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

The idea behind Airports of Thailand and TKS Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.