Correlation Between Air Transport and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both Air Transport and GOLD ROAD 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 GOLD ROAD 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 GOLD ROAD RES, you can compare the effects of market volatilities on Air Transport and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and GOLD ROAD.
Diversification Opportunities for Air Transport and GOLD ROAD
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and GOLD is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Air Transport i.e., Air Transport and GOLD ROAD go up and down completely randomly.
Pair Corralation between Air Transport and GOLD ROAD
Assuming the 90 days horizon Air Transport Services is expected to generate 2.72 times more return on investment than GOLD ROAD. However, Air Transport is 2.72 times more volatile than GOLD ROAD RES. It trades about 0.26 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about -0.09 per unit of risk. If you would invest 1,580 in Air Transport Services on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Air Transport Services or generate 31.65% 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. GOLD ROAD RES
Performance |
| Timeline |
| Air Transport Services |
| GOLD ROAD RES |
Air Transport and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and GOLD ROAD
The main advantage of trading using opposite Air Transport and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| Air Transport vs. Digilife Technologies Limited | Air Transport vs. COMBA TELECOM SYST | Air Transport vs. Singapore Telecommunications Limited | Air Transport vs. Chunghwa Telecom Co |
| GOLD ROAD vs. ACCSYS TECHPLC EO | GOLD ROAD vs. Align Technology | GOLD ROAD vs. AAC TECHNOLOGHLDGADR | GOLD ROAD vs. ORMAT TECHNOLOGIES |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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