Correlation Between Aerospace Industrial and Air Asia
Can any of the company-specific risk be diversified away by investing in both Aerospace Industrial and Air Asia 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 Aerospace Industrial and Air Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerospace Industrial Development and Air Asia Co, you can compare the effects of market volatilities on Aerospace Industrial and Air Asia 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 Aerospace Industrial with a short position of Air Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerospace Industrial and Air Asia.
Diversification Opportunities for Aerospace Industrial and Air Asia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aerospace and Air is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aerospace Industrial Developme and Air Asia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Asia and Aerospace Industrial 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 Aerospace Industrial Development are associated (or correlated) with Air Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Asia has no effect on the direction of Aerospace Industrial i.e., Aerospace Industrial and Air Asia go up and down completely randomly.
Pair Corralation between Aerospace Industrial and Air Asia
Assuming the 90 days trading horizon Aerospace Industrial Development is expected to generate 0.93 times more return on investment than Air Asia. However, Aerospace Industrial Development is 1.07 times less risky than Air Asia. It trades about -0.03 of its potential returns per unit of risk. Air Asia Co is currently generating about -0.16 per unit of risk. If you would invest 4,455 in Aerospace Industrial Development on August 30, 2024 and sell it today you would lose (45.00) from holding Aerospace Industrial Development or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aerospace Industrial Developme vs. Air Asia Co
Performance |
| Timeline |
| Aerospace Industrial |
| Air Asia |
Aerospace Industrial and Air Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerospace Industrial and Air Asia
The main advantage of trading using opposite Aerospace Industrial and Air Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerospace Industrial position performs unexpectedly, Air Asia 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 Air Asia will offset losses from the drop in Air Asia's long position.The idea behind Aerospace Industrial Development and Air Asia Co 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.| Air Asia vs. Hsinli Chemical Industrial | Air Asia vs. Taita Chemical Co | Air Asia vs. PlayNitride | Air Asia vs. Sports Gear Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |