Correlation Between Flughafen Zürich and Airports

Can any of the company-specific risk be diversified away by investing in both Flughafen Zürich and Airports 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 Flughafen Zürich and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flughafen Zrich AG and Airports of Thailand, you can compare the effects of market volatilities on Flughafen Zürich and Airports 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 Flughafen Zürich with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flughafen Zürich and Airports.

Diversification Opportunities for Flughafen Zürich and Airports

-0.1

Correlation Coefficient

Flughafen Zürich  Airports

Good diversification

The 3 months correlation between Flughafen and Airports is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Flughafen Zrich AG and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and Flughafen Zürich 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 Flughafen Zrich AG are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Flughafen Zürich i.e., Flughafen Zürich and Airports go up and down completely randomly.

Pair Corralation between Flughafen Zürich and Airports

Assuming the 90 days horizon Flughafen Zrich AG is expected to generate 0.21 times more return on investment than Airports. However, Flughafen Zrich AG is 4.67 times less risky than Airports. It trades about 0.02 of its potential returns per unit of risk. Airports of Thailand is currently generating about -0.06 per unit of risk. If you would invest  947.00  in Flughafen Zrich AG on November 29, 2024 and sell it today you would earn a total of  7.00  from holding Flughafen Zrich AG or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Flughafen Zrich AG  vs.  Airports of Thailand

Flughafen Zrich AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flughafen Zrich AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Flughafen Zürich is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Flughafen Zürich and Airports

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

The idea behind Flughafen Zrich AG and Airports of Thailand 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .