Correlation Between BA Airport and Phatra Leasing

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

By analyzing existing cross correlation between BA Airport Leasehold and Phatra Leasing Public, you can compare the effects of market volatilities on BA Airport and Phatra Leasing 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 BA Airport with a short position of Phatra Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of BA Airport and Phatra Leasing.

Diversification Opportunities for BA Airport and Phatra Leasing

0.61

Correlation Coefficient

BA Airport  Phatra Leasing

Poor diversification

The 3 months correlation between BAREIT and Phatra is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding BA Airport Leasehold and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing Public and BA Airport 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 BA Airport Leasehold are associated (or correlated) with Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of BA Airport i.e., BA Airport and Phatra Leasing go up and down completely randomly.

Pair Corralation between BA Airport and Phatra Leasing

Assuming the 90 days trading horizon BA Airport is expected to generate 6.25 times less return on investment than Phatra Leasing. But when comparing it to its historical volatility, BA Airport Leasehold is 4.74 times less risky than Phatra Leasing. It trades about 0.07 of its potential returns per unit of risk. Phatra Leasing Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Phatra Leasing Public on April 22, 2025 and sell it today you would earn a total of  19.00  from holding Phatra Leasing Public or generate 18.45% return on investment over 90 days.

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

BA Airport Leasehold  vs.  Phatra Leasing Public

BA Airport Leasehold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BA Airport Leasehold are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BA Airport is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Phatra Leasing Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Phatra Leasing Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Phatra Leasing disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BA Airport and Phatra Leasing

The main advantage of trading using opposite BA Airport and Phatra Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BA Airport position performs unexpectedly, Phatra Leasing 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 Phatra Leasing will offset losses from the drop in Phatra Leasing's long position.

The idea behind BA Airport Leasehold and Phatra Leasing Public 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.