Correlation Between Air Transport and Allient
Can any of the company-specific risk be diversified away by investing in both Air Transport and Allient 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 Transport and Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Allient, you can compare the effects of market volatilities on Air Transport and Allient 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 Transport with a short position of Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Allient.
Diversification Opportunities for Air Transport and Allient
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Allient is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient and Air Transport 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 Transport Services are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Air Transport i.e., Air Transport and Allient go up and down completely randomly.
Pair Corralation between Air Transport and Allient
Given the investment horizon of 90 days Air Transport is expected to generate 13.35 times less return on investment than Allient. But when comparing it to its historical volatility, Air Transport Services is 28.75 times less risky than Allient. It trades about 0.53 of its potential returns per unit of risk. Allient is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,361 in Allient on October 23, 2024 and sell it today you would earn a total of 302.00 from holding Allient or generate 12.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Allient
Performance |
| Timeline |
| Air Transport Services |
| Allient |
Air Transport and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Allient
The main advantage of trading using opposite Air Transport and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
| Allient vs. Compania Cervecerias Unidas | Allient vs. Willamette Valley Vineyards | Allient vs. Ambev SA ADR | Allient vs. Chemours Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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