Correlation Between Air Canada and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Air Canada and XTANT MEDICAL 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 Air Canada and XTANT MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Canada and XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Air Canada and XTANT MEDICAL 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 Air Canada with a short position of XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and XTANT MEDICAL.
Diversification Opportunities for Air Canada and XTANT MEDICAL
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and XTANT is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS and Air Canada 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 Air Canada are associated (or correlated) with XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Air Canada i.e., Air Canada and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Air Canada and XTANT MEDICAL
Assuming the 90 days trading horizon Air Canada is expected to generate 0.44 times more return on investment than XTANT MEDICAL. However, Air Canada is 2.3 times less risky than XTANT MEDICAL. It trades about 0.02 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about 0.0 per unit of risk. If you would invest 1,323 in Air Canada on September 24, 2024 and sell it today you would earn a total of 144.00 from holding Air Canada or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Canada vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Air Canada |
| XTANT MEDICAL HLDGS |
Air Canada and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Canada and XTANT MEDICAL
The main advantage of trading using opposite Air Canada and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.The idea behind Air Canada and XTANT MEDICAL HLDGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| XTANT MEDICAL vs. SHIN ETSU CHEMICAL | XTANT MEDICAL vs. SEKISUI CHEMICAL | XTANT MEDICAL vs. Soken Chemical Engineering | XTANT MEDICAL vs. Silicon Motion Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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