Correlation Between Air Transport and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both Air Transport and LithiumBank Resources 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 LithiumBank Resources 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 LithiumBank Resources Corp, you can compare the effects of market volatilities on Air Transport and LithiumBank Resources 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 LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and LithiumBank Resources.
Diversification Opportunities for Air Transport and LithiumBank Resources
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and LithiumBank is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources 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 LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of Air Transport i.e., Air Transport and LithiumBank Resources go up and down completely randomly.
Pair Corralation between Air Transport and LithiumBank Resources
Given the investment horizon of 90 days Air Transport Services is expected to generate 0.72 times more return on investment than LithiumBank Resources. However, Air Transport Services is 1.39 times less risky than LithiumBank Resources. It trades about 0.0 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about -0.03 per unit of risk. If you would invest 2,768 in Air Transport Services on September 3, 2024 and sell it today you would lose (572.00) from holding Air Transport Services or give up 20.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. LithiumBank Resources Corp
Performance |
| Timeline |
| Air Transport Services |
| LithiumBank Resources |
Air Transport and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and LithiumBank Resources
The main advantage of trading using opposite Air Transport and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, LithiumBank Resources 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 LithiumBank Resources will offset losses from the drop in LithiumBank Resources' long position.| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Anson Resources Limited | LithiumBank Resources vs. Avarone Metals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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