Correlation Between Air Transport and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both Air Transport and KAUFMAN ET 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 KAUFMAN ET 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 KAUFMAN ET BROAD, you can compare the effects of market volatilities on Air Transport and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and KAUFMAN ET.
Diversification Opportunities for Air Transport and KAUFMAN ET
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and KAUFMAN is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Air Transport i.e., Air Transport and KAUFMAN ET go up and down completely randomly.
Pair Corralation between Air Transport and KAUFMAN ET
Assuming the 90 days horizon Air Transport Services is expected to under-perform the KAUFMAN ET. In addition to that, Air Transport is 1.58 times more volatile than KAUFMAN ET BROAD. It trades about 0.0 of its total potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about 0.05 per unit of volatility. If you would invest 2,271 in KAUFMAN ET BROAD on August 26, 2024 and sell it today you would earn a total of 939.00 from holding KAUFMAN ET BROAD or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| Air Transport Services |
| KAUFMAN ET BROAD |
Air Transport and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and KAUFMAN ET
The main advantage of trading using opposite Air Transport and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| Air Transport vs. OURGAME INTHOLDL 00005 | Air Transport vs. Penn National Gaming | Air Transport vs. Games Workshop Group | Air Transport vs. PENN NATL GAMING |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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