Correlation Between Azion and Air Asia
Can any of the company-specific risk be diversified away by investing in both Azion 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 Azion and Air Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azion and Air Asia Co, you can compare the effects of market volatilities on Azion 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 Azion with a short position of Air Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azion and Air Asia.
Diversification Opportunities for Azion and Air Asia
Weak diversification
The 3 months correlation between Azion and Air is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Azion and Air Asia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Asia and Azion 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 Azion 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 Azion i.e., Azion and Air Asia go up and down completely randomly.
Pair Corralation between Azion and Air Asia
Assuming the 90 days trading horizon Azion is expected to generate 1.1 times more return on investment than Air Asia. However, Azion is 1.1 times more volatile than Air Asia Co. It trades about 0.06 of its potential returns per unit of risk. Air Asia Co is currently generating about 0.06 per unit of risk. If you would invest 1,249 in Azion on September 3, 2024 and sell it today you would earn a total of 1,301 from holding Azion or generate 104.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azion vs. Air Asia Co
Performance |
| Timeline |
| Azion |
| Air Asia |
Azion and Air Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azion and Air Asia
The main advantage of trading using opposite Azion and Air Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azion 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.| Azion vs. Sunspring Metal Corp | Azion vs. Simple Mart Retail | Azion vs. Excelsior Medical Co | Azion vs. Dynamic Medical Technologies |
| Air Asia vs. Eva Airways Corp | Air Asia vs. Taiwan High Speed | Air Asia vs. China Airlines | Air Asia vs. Formosa Plastics 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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