Correlation Between Air Transport and Sumitomo Electric
Can any of the company-specific risk be diversified away by investing in both Air Transport and Sumitomo Electric 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 Sumitomo Electric 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 Sumitomo Electric Industries, you can compare the effects of market volatilities on Air Transport and Sumitomo Electric 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 Sumitomo Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Sumitomo Electric.
Diversification Opportunities for Air Transport and Sumitomo Electric
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and Sumitomo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Sumitomo Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Electric 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 Sumitomo Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Electric has no effect on the direction of Air Transport i.e., Air Transport and Sumitomo Electric go up and down completely randomly.
Pair Corralation between Air Transport and Sumitomo Electric
If you would invest 1,629 in Air Transport Services on September 13, 2024 and sell it today you would earn a total of 565.00 from holding Air Transport Services or generate 34.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Sumitomo Electric Industries
Performance |
| Timeline |
| Air Transport Services |
| Sumitomo Electric |
Air Transport and Sumitomo Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Sumitomo Electric
The main advantage of trading using opposite Air Transport and Sumitomo Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Sumitomo Electric 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 Sumitomo Electric will offset losses from the drop in Sumitomo Electric'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 |
| Sumitomo Electric vs. PT Astra International | Sumitomo Electric vs. Astra International Tbk | Sumitomo Electric vs. Mobileye Global Class | Sumitomo Electric vs. HUMANA INC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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