Correlation Between Air New and Havilah Resources
Can any of the company-specific risk be diversified away by investing in both Air New and Havilah Resources 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 Havilah Resources 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 Havilah Resources, you can compare the effects of market volatilities on Air New and Havilah Resources 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 Havilah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Havilah Resources.
Diversification Opportunities for Air New and Havilah Resources
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Havilah is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Havilah Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havilah Resources 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 Havilah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havilah Resources has no effect on the direction of Air New i.e., Air New and Havilah Resources go up and down completely randomly.
Pair Corralation between Air New and Havilah Resources
Assuming the 90 days trading horizon Air New Zealand is expected to under-perform the Havilah Resources. But the stock apears to be less risky and, when comparing its historical volatility, Air New Zealand is 3.3 times less risky than Havilah Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Havilah Resources is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Havilah Resources on September 3, 2024 and sell it today you would lose (14.00) from holding Havilah Resources or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Havilah Resources
Performance |
| Timeline |
| Air New Zealand |
| Havilah Resources |
Air New and Havilah Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Havilah Resources
The main advantage of trading using opposite Air New and Havilah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Havilah Resources 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 Havilah Resources will offset losses from the drop in Havilah Resources' long position.| Air New vs. Jupiter Energy | Air New vs. WA1 Resources | Air New vs. Predictive Discovery | Air New vs. Cooper Metals |
| Havilah Resources vs. Magellan Financial Group | Havilah Resources vs. National Australia Bank | Havilah Resources vs. Kkr Credit Income | Havilah Resources vs. Queste Communications |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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