Correlation Between Air Transport and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Air Transport and Perseus Mining 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 Perseus Mining 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 Perseus Mining Limited, you can compare the effects of market volatilities on Air Transport and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Perseus Mining.
Diversification Opportunities for Air Transport and Perseus Mining
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and Perseus is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Air Transport i.e., Air Transport and Perseus Mining go up and down completely randomly.
Pair Corralation between Air Transport and Perseus Mining
Assuming the 90 days horizon Air Transport Services is expected to generate 2.38 times more return on investment than Perseus Mining. However, Air Transport is 2.38 times more volatile than Perseus Mining Limited. It trades about 0.26 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.11 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Perseus Mining Limited
Performance |
| Timeline |
| Air Transport Services |
| Perseus Mining |
Air Transport and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Perseus Mining
The main advantage of trading using opposite Air Transport and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining'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 |
| Perseus Mining vs. COSMOSTEEL HLDGS | Perseus Mining vs. NIPPON STEEL SPADR | Perseus Mining vs. Tianjin Capital Environmental | Perseus Mining vs. CECO ENVIRONMENTAL |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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