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
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Public and AirAsia is -0.59. 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 0.82 times more return on investment than AirAsia X. However, Public Packages Holdings is 1.22 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 0.0 per unit of risk. If you would invest 71.00 in Public Packages Holdings on September 15, 2024 and sell it today you would earn a total of 13.00 from holding Public Packages Holdings or generate 18.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| 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. Malayan Banking Bhd | Public Packages vs. Public Bank Bhd | Public Packages vs. Petronas Chemicals Group | Public Packages vs. Tenaga Nasional Bhd |
| AirAsia X vs. Public Packages Holdings | AirAsia X vs. Binasat Communications Bhd | AirAsia X vs. Awanbiru Technology Bhd | AirAsia X vs. Sports Toto Berhad |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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