Correlation Between Air T and CH Robinson
Can any of the company-specific risk be diversified away by investing in both Air T and CH Robinson 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 T and CH Robinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air T Inc and CH Robinson Worldwide, you can compare the effects of market volatilities on Air T and CH Robinson 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 T with a short position of CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air T and CH Robinson.
Diversification Opportunities for Air T and CH Robinson
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and CHRW is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Air T Inc and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide and Air T 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 T Inc are associated (or correlated) with CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of Air T i.e., Air T and CH Robinson go up and down completely randomly.
Pair Corralation between Air T and CH Robinson
Assuming the 90 days horizon Air T Inc is expected to generate 0.76 times more return on investment than CH Robinson. However, Air T Inc is 1.31 times less risky than CH Robinson. It trades about 0.08 of its potential returns per unit of risk. CH Robinson Worldwide is currently generating about -0.06 per unit of risk. If you would invest 1,691 in Air T Inc on August 30, 2024 and sell it today you would earn a total of 36.00 from holding Air T Inc or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air T Inc vs. CH Robinson Worldwide
Performance |
| Timeline |
| Air T Inc |
| CH Robinson Worldwide |
Air T and CH Robinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air T and CH Robinson
The main advantage of trading using opposite Air T and CH Robinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air T position performs unexpectedly, CH Robinson 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 CH Robinson will offset losses from the drop in CH Robinson's long position.The idea behind Air T Inc and CH Robinson Worldwide 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.| CH Robinson vs. JB Hunt Transport | CH Robinson vs. Expeditors International of | CH Robinson vs. Hub Group | CH Robinson vs. Landstar System |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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