Correlation Between Gunkul Engineering and Airports

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

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

Diversification Opportunities for Gunkul Engineering and Airports

0.75

Correlation Coefficient

Gunkul Engineering  Airports

Poor diversification

The 3 months correlation between Gunkul and Airports is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public 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 Gunkul Engineering 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 Gunkul Engineering Public 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 Gunkul Engineering i.e., Gunkul Engineering and Airports go up and down completely randomly.

Pair Corralation between Gunkul Engineering and Airports

Assuming the 90 days trading horizon Gunkul Engineering Public is expected to under-perform the Airports. In addition to that, Gunkul Engineering is 2.24 times more volatile than Airports of Thailand. It trades about -0.08 of its total potential returns per unit of risk. Airports of Thailand is currently generating about -0.02 per unit of volatility. If you would invest  6,121  in Airports of Thailand on September 12, 2024 and sell it today you would lose (71.00) from holding Airports of Thailand or give up 1.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Gunkul Engineering Public  vs.  Airports of Thailand

Gunkul Engineering Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gunkul Engineering Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Airports of Thailand

Risk-Adjusted Performance

0 of 100

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 quite persistent basic indicators, Airports is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gunkul Engineering and Airports

The main advantage of trading using opposite Gunkul Engineering and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunkul Engineering 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 Gunkul Engineering Public 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.