Correlation Between EMBARK EDUCATION and Air Transport
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION 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 EMBARK EDUCATION and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and Air Transport Services, you can compare the effects of market volatilities on EMBARK EDUCATION 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 EMBARK EDUCATION with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and Air Transport.
Diversification Opportunities for EMBARK EDUCATION and Air Transport
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EMBARK and Air is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and Air Transport go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and Air Transport
Assuming the 90 days horizon EMBARK EDUCATION is expected to generate 1.6 times less return on investment than Air Transport. But when comparing it to its historical volatility, EMBARK EDUCATION LTD is 1.54 times less risky than Air Transport. It trades about 0.22 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,970 in Air Transport Services on September 5, 2024 and sell it today you would earn a total of 110.00 from holding Air Transport Services or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. Air Transport Services
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
| Air Transport Services |
EMBARK EDUCATION and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and Air Transport
The main advantage of trading using opposite EMBARK EDUCATION and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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.| EMBARK EDUCATION vs. Ross Stores | EMBARK EDUCATION vs. QURATE RETAIL INC | EMBARK EDUCATION vs. UMC Electronics Co | EMBARK EDUCATION vs. AEON STORES |
| Air Transport vs. Airports of Thailand | Air Transport vs. Airports of Thailand | Air Transport vs. Aena SME SA | Air Transport vs. AENA SME UNSPADR110 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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