Correlation Between ABACUS STORAGE and Air New
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Air New 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 ABACUS STORAGE and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Air New Zealand, you can compare the effects of market volatilities on ABACUS STORAGE and Air New 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 ABACUS STORAGE with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Air New.
Diversification Opportunities for ABACUS STORAGE and Air New
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ABACUS and Air is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Air New go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Air New
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 43.66 times more return on investment than Air New. However, ABACUS STORAGE is 43.66 times more volatile than Air New Zealand. It trades about 0.06 of its potential returns per unit of risk. Air New Zealand is currently generating about -0.03 per unit of risk. If you would invest 100.00 in ABACUS STORAGE KING on September 1, 2024 and sell it today you would earn a total of 21.00 from holding ABACUS STORAGE KING or generate 21.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Air New Zealand
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Air New Zealand |
ABACUS STORAGE and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Air New
The main advantage of trading using opposite ABACUS STORAGE and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Air New 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 New will offset losses from the drop in Air New's long position.| ABACUS STORAGE vs. Westpac Banking | ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Imricor Medical Systems | ABACUS STORAGE vs. Midway |
| Air New vs. Carlton Investments | Air New vs. Auctus Alternative Investments | Air New vs. Diversified United Investment | Air New vs. REGAL ASIAN INVESTMENTS |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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