Correlation Between Asia Aviation and CIMB Thai
Can any of the company-specific risk be diversified away by investing in both Asia Aviation and CIMB Thai 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 Asia Aviation and CIMB Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Aviation Public and CIMB Thai Bank, you can compare the effects of market volatilities on Asia Aviation and CIMB Thai 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 Asia Aviation with a short position of CIMB Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Aviation and CIMB Thai.
Diversification Opportunities for Asia Aviation and CIMB Thai
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and CIMB is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Asia Aviation Public and CIMB Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMB Thai Bank and Asia Aviation 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 Asia Aviation Public are associated (or correlated) with CIMB Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMB Thai Bank has no effect on the direction of Asia Aviation i.e., Asia Aviation and CIMB Thai go up and down completely randomly.
Pair Corralation between Asia Aviation and CIMB Thai
Assuming the 90 days trading horizon Asia Aviation Public is expected to generate 1.28 times more return on investment than CIMB Thai. However, Asia Aviation is 1.28 times more volatile than CIMB Thai Bank. It trades about 0.03 of its potential returns per unit of risk. CIMB Thai Bank is currently generating about -0.2 per unit of risk. If you would invest 264.00 in Asia Aviation Public on September 26, 2024 and sell it today you would earn a total of 6.00 from holding Asia Aviation Public or generate 2.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Asia Aviation Public vs. CIMB Thai Bank
Performance |
Timeline |
Asia Aviation Public |
CIMB Thai Bank |
Asia Aviation and CIMB Thai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asia Aviation and CIMB Thai
The main advantage of trading using opposite Asia Aviation and CIMB Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Aviation position performs unexpectedly, CIMB Thai 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 CIMB Thai will offset losses from the drop in CIMB Thai's long position.Asia Aviation vs. Land and Houses | Asia Aviation vs. CH Karnchang Public | Asia Aviation vs. Krung Thai Bank | Asia Aviation vs. Bangkok Bank Public |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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