Correlation Between Superior Plus and Air Transport
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Air Transport 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 Superior Plus and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Air Transport Services, you can compare the effects of market volatilities on Superior Plus and Air Transport 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 Superior Plus with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Air Transport.
Diversification Opportunities for Superior Plus and Air Transport
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Air is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Superior Plus i.e., Superior Plus and Air Transport go up and down completely randomly.
Pair Corralation between Superior Plus and Air Transport
Assuming the 90 days horizon Superior Plus is expected to generate 11.48 times less return on investment than Air Transport. But when comparing it to its historical volatility, Superior Plus Corp is 1.08 times less risky than Air Transport. It trades about 0.02 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,580 in Air Transport Services on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Air Transport Services or generate 31.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Air Transport Services
Performance |
| Timeline |
| Superior Plus Corp |
| Air Transport Services |
Superior Plus and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Air Transport
The main advantage of trading using opposite Superior Plus and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Air Transport 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 Transport will offset losses from the drop in Air Transport's long position.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
| Air Transport vs. Digilife Technologies Limited | Air Transport vs. COMBA TELECOM SYST | Air Transport vs. Singapore Telecommunications Limited | Air Transport vs. Chunghwa Telecom 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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