Correlation Between Air New and Group 6
Can any of the company-specific risk be diversified away by investing in both Air New and Group 6 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 New and Group 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Group 6 Metals, you can compare the effects of market volatilities on Air New and Group 6 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 New with a short position of Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Group 6.
Diversification Opportunities for Air New and Group 6
Pay attention - limited upside
The 3 months correlation between Air and Group is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals and Air New 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 New Zealand are associated (or correlated) with Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Air New i.e., Air New and Group 6 go up and down completely randomly.
Pair Corralation between Air New and Group 6
If you would invest 54.00 in Air New Zealand on November 11, 2024 and sell it today you would earn a total of 2.00 from holding Air New Zealand or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Group 6 Metals
Performance |
| Timeline |
| Air New Zealand |
| Group 6 Metals |
Air New and Group 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Group 6
The main advantage of trading using opposite Air New and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.| Air New vs. Gold Road Resources | Air New vs. Aurelia Metals | Air New vs. Beston Global Food | Air New vs. Falcon Metals |
| Group 6 vs. Centrex Metals | Group 6 vs. Stelar Metals | Group 6 vs. Australian Agricultural | Group 6 vs. Falcon Metals |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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