Correlation Between Air Transport and Onxeo SA
Can any of the company-specific risk be diversified away by investing in both Air Transport and Onxeo SA 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 Onxeo SA 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 Onxeo SA, you can compare the effects of market volatilities on Air Transport and Onxeo SA 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 Onxeo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Onxeo SA.
Diversification Opportunities for Air Transport and Onxeo SA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Onxeo is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Onxeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onxeo SA 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 Onxeo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onxeo SA has no effect on the direction of Air Transport i.e., Air Transport and Onxeo SA go up and down completely randomly.
Pair Corralation between Air Transport and Onxeo SA
Assuming the 90 days horizon Air Transport is expected to generate 3.59 times less return on investment than Onxeo SA. But when comparing it to its historical volatility, Air Transport Services is 16.6 times less risky than Onxeo SA. It trades about 0.19 of its potential returns per unit of risk. Onxeo SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7.91 in Onxeo SA on November 3, 2024 and sell it today you would lose (0.18) from holding Onxeo SA or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Onxeo SA
Performance |
| Timeline |
| Air Transport Services |
| Onxeo SA |
Air Transport and Onxeo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Onxeo SA
The main advantage of trading using opposite Air Transport and Onxeo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Onxeo SA 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 Onxeo SA will offset losses from the drop in Onxeo SA's long position.| Air Transport vs. BURLINGTON STORES | Air Transport vs. MAG SILVER | Air Transport vs. GOME Retail Holdings | Air Transport vs. Yanzhou Coal Mining |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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