Correlation Between Air Transport and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Air Transport and ULTRA CLEAN 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 ULTRA CLEAN 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 ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Air Transport and ULTRA CLEAN 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 ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and ULTRA CLEAN.
Diversification Opportunities for Air Transport and ULTRA CLEAN
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and ULTRA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS 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 ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of Air Transport i.e., Air Transport and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Air Transport and ULTRA CLEAN
Assuming the 90 days horizon Air Transport Services is expected to generate 0.15 times more return on investment than ULTRA CLEAN. However, Air Transport Services is 6.59 times less risky than ULTRA CLEAN. It trades about 0.1 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about -0.13 per unit of risk. If you would invest 2,100 in Air Transport Services on October 30, 2024 and sell it today you would earn a total of 20.00 from holding Air Transport Services or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Air Transport Services |
| ULTRA CLEAN HLDGS |
Air Transport and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and ULTRA CLEAN
The main advantage of trading using opposite Air Transport and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| Air Transport vs. Columbia Sportswear | Air Transport vs. ALTAIR RES INC | Air Transport vs. JD SPORTS FASH | Air Transport vs. SEALED AIR |
| ULTRA CLEAN vs. Vulcan Materials | ULTRA CLEAN vs. GOODYEAR T RUBBER | ULTRA CLEAN vs. United Breweries Co | ULTRA CLEAN vs. Plastic Omnium |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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