Correlation Between Air Transport and X FAB
Can any of the company-specific risk be diversified away by investing in both Air Transport and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Air Transport and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and X FAB.
Diversification Opportunities for Air Transport and X FAB
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and XFB is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Air Transport i.e., Air Transport and X FAB go up and down completely randomly.
Pair Corralation between Air Transport and X FAB
Assuming the 90 days horizon Air Transport Services is expected to generate 1.09 times more return on investment than X FAB. However, Air Transport is 1.09 times more volatile than X FAB Silicon Foundries. It trades about 0.19 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.01 per unit of risk. If you would invest 1,510 in Air Transport Services on October 17, 2024 and sell it today you would earn a total of 630.00 from holding Air Transport Services or generate 41.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Air Transport Services vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Air Transport Services |
| X FAB Silicon |
Air Transport and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and X FAB
The main advantage of trading using opposite Air Transport and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Air Transport vs. Gaztransport Technigaz SA | Air Transport vs. Columbia Sportswear | Air Transport vs. Clean Energy Fuels | Air Transport vs. SPORTING |
| X FAB vs. Gaztransport Technigaz SA | X FAB vs. SCIENCE IN SPORT | X FAB vs. Air Transport Services | X FAB vs. Fukuyama Transporting Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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