Correlation Between Air Transport and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Air Transport and LIFENET INSURANCE 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 LIFENET INSURANCE 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 LIFENET INSURANCE CO, you can compare the effects of market volatilities on Air Transport and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and LIFENET INSURANCE.
Diversification Opportunities for Air Transport and LIFENET INSURANCE
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and LIFENET is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Air Transport i.e., Air Transport and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Air Transport and LIFENET INSURANCE
Assuming the 90 days horizon Air Transport is expected to generate 1.42 times less return on investment than LIFENET INSURANCE. In addition to that, Air Transport is 1.15 times more volatile than LIFENET INSURANCE CO. It trades about 0.07 of its total potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about 0.11 per unit of volatility. If you would invest 650.00 in LIFENET INSURANCE CO on August 25, 2024 and sell it today you would earn a total of 560.00 from holding LIFENET INSURANCE CO or generate 86.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Air Transport Services |
| LIFENET INSURANCE |
Air Transport and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and LIFENET INSURANCE
The main advantage of trading using opposite Air Transport and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE'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 |
| LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE vs. Xtrackers LevDAX |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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