Correlation Between Public Packages and AirAsia X
Can any of the company-specific risk be diversified away by investing in both Public Packages and AirAsia X 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 Public Packages and AirAsia X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Packages Holdings and AirAsia X Bhd, you can compare the effects of market volatilities on Public Packages and AirAsia X 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 Public Packages with a short position of AirAsia X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Packages and AirAsia X.
Diversification Opportunities for Public Packages and AirAsia X
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Public and AirAsia is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Public Packages Holdings and AirAsia X Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirAsia X Bhd and Public Packages 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 Public Packages Holdings are associated (or correlated) with AirAsia X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirAsia X Bhd has no effect on the direction of Public Packages i.e., Public Packages and AirAsia X go up and down completely randomly.
Pair Corralation between Public Packages and AirAsia X
Assuming the 90 days trading horizon Public Packages Holdings is expected to generate 0.57 times more return on investment than AirAsia X. However, Public Packages Holdings is 1.76 times less risky than AirAsia X. It trades about -0.04 of its potential returns per unit of risk. AirAsia X Bhd is currently generating about -0.07 per unit of risk. If you would invest 82.00 in Public Packages Holdings on October 20, 2024 and sell it today you would lose (1.00) from holding Public Packages Holdings or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Packages Holdings vs. AirAsia X Bhd
Performance |
| Timeline |
| Public Packages Holdings |
| AirAsia X Bhd |
Public Packages and AirAsia X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Packages and AirAsia X
The main advantage of trading using opposite Public Packages and AirAsia X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Packages position performs unexpectedly, AirAsia X 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 AirAsia X will offset losses from the drop in AirAsia X's long position.| Public Packages vs. Sports Toto Berhad | Public Packages vs. Leader Steel Holdings | Public Packages vs. YX Precious Metals | Public Packages vs. SSF Home Group |
| AirAsia X vs. YX Precious Metals | AirAsia X vs. Star Media Group | AirAsia X vs. Central Industrial Corp | AirAsia X vs. Sapura Industrial Bhd |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |