Correlation Between Air New and National Australia
Can any of the company-specific risk be diversified away by investing in both Air New and National Australia 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 National Australia 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 National Australia Bank, you can compare the effects of market volatilities on Air New and National Australia 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 National Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and National Australia.
Diversification Opportunities for Air New and National Australia
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and National is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and National Australia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Australia Bank 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 National Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Australia Bank has no effect on the direction of Air New i.e., Air New and National Australia go up and down completely randomly.
Pair Corralation between Air New and National Australia
Assuming the 90 days trading horizon Air New Zealand is expected to generate 4.7 times more return on investment than National Australia. However, Air New is 4.7 times more volatile than National Australia Bank. It trades about 0.25 of its potential returns per unit of risk. National Australia Bank is currently generating about -0.18 per unit of risk. If you would invest 48.00 in Air New Zealand on September 15, 2024 and sell it today you would earn a total of 3.00 from holding Air New Zealand or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. National Australia Bank
Performance |
| Timeline |
| Air New Zealand |
| National Australia Bank |
Air New and National Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and National Australia
The main advantage of trading using opposite Air New and National Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, National Australia 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 National Australia will offset losses from the drop in National Australia's long position.| Air New vs. Dicker Data | Air New vs. Mirrabooka Investments | Air New vs. Australian Strategic Materials | Air New vs. Diversified United Investment |
| National Australia vs. Westpac Banking | National Australia vs. De Grey Mining | National Australia vs. Pointsbet Holdings | National Australia vs. Indiana Resources |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |