Correlation Between Airports and NForce Secure
Can any of the company-specific risk be diversified away by investing in both Airports and NForce Secure 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 NForce Secure 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 nForce Secure Public, you can compare the effects of market volatilities on Airports and NForce Secure 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 NForce Secure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airports and NForce Secure.
Diversification Opportunities for Airports and NForce Secure
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Airports and NForce is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Airports of Thailand and nForce Secure Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nForce Secure 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 NForce Secure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nForce Secure Public has no effect on the direction of Airports i.e., Airports and NForce Secure go up and down completely randomly.
Pair Corralation between Airports and NForce Secure
Assuming the 90 days trading horizon Airports of Thailand is expected to generate 75.47 times more return on investment than NForce Secure. However, Airports is 75.47 times more volatile than nForce Secure Public. It trades about 0.11 of its potential returns per unit of risk. nForce Secure Public is currently generating about -0.1 per unit of risk. If you would invest 7,070 in Airports of Thailand on September 15, 2024 and sell it today you would lose (945.00) from holding Airports of Thailand or give up 13.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Airports of Thailand vs. nForce Secure Public
Performance |
Timeline |
Airports of Thailand |
nForce Secure Public |
Airports and NForce Secure Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Airports and NForce Secure
The main advantage of trading using opposite Airports and NForce Secure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airports position performs unexpectedly, NForce Secure 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 NForce Secure will offset losses from the drop in NForce Secure's long position.Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Bangkok Dusit Medical | Airports vs. The Siam Cement |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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