Correlation Between Saker Aviation and Airports

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

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

Diversification Opportunities for Saker Aviation and Airports

0.15

Correlation Coefficient

Saker Aviation  Airports

Average diversification

The 3 months correlation between Saker and Airports is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Saker Aviation Services 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 Saker 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 Saker Aviation Services 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 Saker Aviation i.e., Saker Aviation and Airports go up and down completely randomly.

Pair Corralation between Saker Aviation and Airports

Given the investment horizon of 90 days Saker Aviation Services is expected to generate 1.06 times more return on investment than Airports. However, Saker Aviation is 1.06 times more volatile than Airports of Thailand. It trades about 0.04 of its potential returns per unit of risk. Airports of Thailand is currently generating about 0.02 per unit of risk. If you would invest  560.00  in Saker Aviation Services on September 13, 2024 and sell it today you would earn a total of  240.00  from holding Saker Aviation Services or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Saker Aviation Services  vs.  Airports of Thailand

Saker Aviation Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saker Aviation Services 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 comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Airports of Thailand

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Airports of Thailand are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Airports showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saker Aviation and Airports

The main advantage of trading using opposite Saker Aviation and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saker Aviation 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 Saker Aviation Services 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.