Correlation Between SATS and Airports
Can any of the company-specific risk be diversified away by investing in both SATS 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 SATS and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SATS and Airports of Thailand, you can compare the effects of market volatilities on SATS 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 SATS with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SATS and Airports.
Diversification Opportunities for SATS and Airports
Significant diversification
The 3 months correlation between SATS and Airports is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SATS 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 SATS 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 SATS 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 SATS i.e., SATS and Airports go up and down completely randomly.
Pair Corralation between SATS and Airports
Assuming the 90 days horizon SATS is expected to under-perform the Airports. But the pink sheet apears to be less risky and, when comparing its historical volatility, SATS is 6.03 times less risky than Airports. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Airports of Thailand is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 145.00 in Airports of Thailand on January 26, 2024 and sell it today you would earn a total of 40.00 from holding Airports of Thailand or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SATS vs. Airports of Thailand
Performance |
| Timeline |
| SATS |
| Airports of Thailand |
SATS and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SATS and Airports
The main advantage of trading using opposite SATS and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SATS 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.| SATS vs. Aeroports de Paris | SATS vs. Corporacion America Airports | SATS vs. Saker Aviation Services | SATS vs. AerSale Corp |
| Airports vs. Aeroports de Paris | Airports vs. Corporacion America Airports | Airports vs. Saker Aviation Services | Airports vs. AerSale Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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