Correlation Between Air France and Reworld Media
Can any of the company-specific risk be diversified away by investing in both Air France and Reworld Media 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 France and Reworld Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air France KLM SA and Reworld Media, you can compare the effects of market volatilities on Air France and Reworld Media 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 France with a short position of Reworld Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air France and Reworld Media.
Diversification Opportunities for Air France and Reworld Media
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Reworld is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Air France KLM SA and Reworld Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reworld Media and Air France 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 France KLM SA are associated (or correlated) with Reworld Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reworld Media has no effect on the direction of Air France i.e., Air France and Reworld Media go up and down completely randomly.
Pair Corralation between Air France and Reworld Media
Assuming the 90 days horizon Air France KLM SA is expected to generate 0.74 times more return on investment than Reworld Media. However, Air France KLM SA is 1.35 times less risky than Reworld Media. It trades about 0.25 of its potential returns per unit of risk. Reworld Media is currently generating about 0.11 per unit of risk. If you would invest 770.00 in Air France KLM SA on November 28, 2024 and sell it today you would earn a total of 89.00 from holding Air France KLM SA or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air France KLM SA vs. Reworld Media
Performance |
| Timeline |
| Air France KLM |
| Reworld Media |
Air France and Reworld Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air France and Reworld Media
The main advantage of trading using opposite Air France and Reworld Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air France position performs unexpectedly, Reworld Media 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 Reworld Media will offset losses from the drop in Reworld Media's long position.| Air France vs. CMG Cleantech SA | Air France vs. Sidetrade | Air France vs. FNP Technologies SA | Air France vs. Fill Up Media |
| Reworld Media vs. CMG Cleantech SA | Reworld Media vs. ZCCM Investments Holdings | Reworld Media vs. Innelec Multimedia | Reworld Media vs. Hotelim Socit Anonyme |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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