Correlation Between Anson Resources and Air New
Can any of the company-specific risk be diversified away by investing in both Anson Resources 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 Anson Resources and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anson Resources and Air New Zealand, you can compare the effects of market volatilities on Anson Resources 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 Anson Resources with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anson Resources and Air New.
Diversification Opportunities for Anson Resources and Air New
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anson and Air is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Anson Resources 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 Anson Resources 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 Anson Resources 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 Anson Resources i.e., Anson Resources and Air New go up and down completely randomly.
Pair Corralation between Anson Resources and Air New
Assuming the 90 days trading horizon Anson Resources is expected to under-perform the Air New. In addition to that, Anson Resources is 4.17 times more volatile than Air New Zealand. It trades about -0.02 of its total potential returns per unit of risk. Air New Zealand is currently generating about -0.03 per unit of volatility. If you would invest 63.00 in Air New Zealand on September 13, 2024 and sell it today you would lose (12.00) from holding Air New Zealand or give up 19.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Anson Resources vs. Air New Zealand
Performance |
| Timeline |
| Anson Resources |
| Air New Zealand |
Anson Resources and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anson Resources and Air New
The main advantage of trading using opposite Anson Resources and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anson Resources 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.| Anson Resources vs. Air New Zealand | Anson Resources vs. Homeco Daily Needs | Anson Resources vs. Hawsons Iron | Anson Resources vs. Carawine Resources Limited |
| Air New vs. Ecofibre | Air New vs. iShares Global Healthcare | Air New vs. Adriatic Metals Plc | Air New vs. Australian Dairy Farms |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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