Correlation Between Air Transport and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Air Transport and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL, you can compare the effects of market volatilities on Air Transport and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and KINGBOARD CHEMICAL.
Diversification Opportunities for Air Transport and KINGBOARD CHEMICAL
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Air and KINGBOARD is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of Air Transport i.e., Air Transport and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between Air Transport and KINGBOARD CHEMICAL
Assuming the 90 days horizon Air Transport Services is expected to generate 0.53 times more return on investment than KINGBOARD CHEMICAL. However, Air Transport Services is 1.89 times less risky than KINGBOARD CHEMICAL. It trades about 0.23 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.05 per unit of risk. If you would invest 1,970 in Air Transport Services on September 4, 2024 and sell it today you would earn a total of 110.00 from holding Air Transport Services or generate 5.58% 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. KINGBOARD CHEMICAL
Performance |
| Timeline |
| Air Transport Services |
| KINGBOARD CHEMICAL |
Air Transport and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and KINGBOARD CHEMICAL
The main advantage of trading using opposite Air Transport and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| Air Transport vs. KINGBOARD CHEMICAL | Air Transport vs. American Eagle Outfitters | Air Transport vs. G III Apparel Group | Air Transport vs. WESTLAKE CHEMICAL |
| KINGBOARD CHEMICAL vs. TOTAL GABON | KINGBOARD CHEMICAL vs. Walgreens Boots Alliance | KINGBOARD CHEMICAL vs. Peak Resources Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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