Correlation Between Air Transport and Palfinger
Can any of the company-specific risk be diversified away by investing in both Air Transport and Palfinger 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 Palfinger 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 Palfinger AG, you can compare the effects of market volatilities on Air Transport and Palfinger 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 Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Palfinger.
Diversification Opportunities for Air Transport and Palfinger
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Palfinger is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG 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 Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of Air Transport i.e., Air Transport and Palfinger go up and down completely randomly.
Pair Corralation between Air Transport and Palfinger
Given the investment horizon of 90 days Air Transport Services is expected to generate 1.88 times more return on investment than Palfinger. However, Air Transport is 1.88 times more volatile than Palfinger AG. It trades about 0.02 of its potential returns per unit of risk. Palfinger AG is currently generating about 0.01 per unit of risk. If you would invest 2,015 in Air Transport Services on September 12, 2024 and sell it today you would earn a total of 178.00 from holding Air Transport Services or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Air Transport Services vs. Palfinger AG
Performance |
| Timeline |
| Air Transport Services |
| Palfinger AG |
Air Transport and Palfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Palfinger
The main advantage of trading using opposite Air Transport and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger's long position.| Air Transport vs. Volaris | Air Transport vs. flyExclusive, | Air Transport vs. Alaska Air Group | Air Transport vs. Copa Holdings SA |
| Palfinger vs. American Airlines Group | Palfinger vs. Air Transport Services | Palfinger vs. European Wax Center | Palfinger vs. Ryanair Holdings PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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