Correlation Between Addtech AB and Air New
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Air New 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 Addtech AB and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Air New Zealand, you can compare the effects of market volatilities on Addtech AB and Air New 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 Addtech AB with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Air New.
Diversification Opportunities for Addtech AB and Air New
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addtech and Air is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and Addtech AB 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 Addtech AB are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Addtech AB i.e., Addtech AB and Air New go up and down completely randomly.
Pair Corralation between Addtech AB and Air New
Assuming the 90 days trading horizon Addtech AB is expected to generate 1.3 times less return on investment than Air New. In addition to that, Addtech AB is 1.01 times more volatile than Air New Zealand. It trades about 0.12 of its total potential returns per unit of risk. Air New Zealand is currently generating about 0.16 per unit of volatility. If you would invest 32.00 in Air New Zealand on November 6, 2024 and sell it today you would earn a total of 2.00 from holding Air New Zealand or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Air New Zealand
Performance |
| Timeline |
| Addtech AB |
| Air New Zealand |
Addtech AB and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Air New
The main advantage of trading using opposite Addtech AB and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Addtech AB vs. STORE ELECTRONIC | Addtech AB vs. USU Software AG | Addtech AB vs. Guidewire Software | Addtech AB vs. Unity Software |
| Air New vs. International Consolidated Airlines | Air New vs. SINGAPORE AIRLINES | Air New vs. Salesforce | Air New vs. SALESFORCE INC CDR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |