Correlation Between Mauna Kea and Air France
Can any of the company-specific risk be diversified away by investing in both Mauna Kea and Air France 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 Mauna Kea and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mauna Kea Technologies and Air France KLM SA, you can compare the effects of market volatilities on Mauna Kea and Air France 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 Mauna Kea with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauna Kea and Air France.
Diversification Opportunities for Mauna Kea and Air France
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mauna and Air is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and Mauna Kea 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 Mauna Kea Technologies are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Mauna Kea i.e., Mauna Kea and Air France go up and down completely randomly.
Pair Corralation between Mauna Kea and Air France
Assuming the 90 days trading horizon Mauna Kea Technologies is expected to under-perform the Air France. In addition to that, Mauna Kea is 2.33 times more volatile than Air France KLM SA. It trades about -0.23 of its total potential returns per unit of risk. Air France KLM SA is currently generating about 0.05 per unit of volatility. If you would invest 752.00 in Air France KLM SA on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Air France KLM SA or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mauna Kea Technologies vs. Air France KLM SA
Performance |
| Timeline |
| Mauna Kea Technologies |
| Air France KLM |
Mauna Kea and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mauna Kea and Air France
The main advantage of trading using opposite Mauna Kea and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauna Kea position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| Mauna Kea vs. LVMH Mot Hennessy | Mauna Kea vs. LOreal SA | Mauna Kea vs. Hermes International SCA | Mauna Kea vs. Manitou BF SA |
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.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |