Correlation Between Air Transport and MSCI
Can any of the company-specific risk be diversified away by investing in both Air Transport and MSCI 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 MSCI 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 MSCI Inc, you can compare the effects of market volatilities on Air Transport and MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and MSCI.
Diversification Opportunities for Air Transport and MSCI
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and MSCI is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of Air Transport i.e., Air Transport and MSCI go up and down completely randomly.
Pair Corralation between Air Transport and MSCI
Assuming the 90 days horizon Air Transport is expected to generate 1.59 times less return on investment than MSCI. In addition to that, Air Transport is 1.76 times more volatile than MSCI Inc. It trades about 0.01 of its total potential returns per unit of risk. MSCI Inc is currently generating about 0.03 per unit of volatility. If you would invest 49,881 in MSCI Inc on November 2, 2024 and sell it today you would earn a total of 7,759 from holding MSCI Inc or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Air Transport Services vs. MSCI Inc
Performance |
| Timeline |
| Air Transport Services |
| MSCI Inc |
Air Transport and MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and MSCI
The main advantage of trading using opposite Air Transport and MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, MSCI 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 MSCI will offset losses from the drop in MSCI's long position.| Air Transport vs. BOS BETTER ONLINE | Air Transport vs. Synovus Financial Corp | Air Transport vs. SALESFORCE INC CDR | Air Transport vs. GungHo Online Entertainment |
| MSCI vs. Tsingtao Brewery | MSCI vs. MOLSON RS BEVERAGE | MSCI vs. ASPEN TECHINC DL | MSCI vs. Sunny Optical Technology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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