Correlation Between Air New and Khiron Life
Can any of the company-specific risk be diversified away by investing in both Air New and Khiron Life 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 New and Khiron Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Khiron Life Sciences, you can compare the effects of market volatilities on Air New and Khiron Life 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 New with a short position of Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Khiron Life.
Diversification Opportunities for Air New and Khiron Life
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Khiron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences and Air New 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 New Zealand are associated (or correlated) with Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of Air New i.e., Air New and Khiron Life go up and down completely randomly.
Pair Corralation between Air New and Khiron Life
Assuming the 90 days trading horizon Air New Zealand is expected to under-perform the Khiron Life. But the stock apears to be less risky and, when comparing its historical volatility, Air New Zealand is 2.64 times less risky than Khiron Life. The stock trades about -0.01 of its potential returns per unit of risk. The Khiron Life Sciences is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3.30 in Khiron Life Sciences on September 20, 2024 and sell it today you would lose (1.14) from holding Khiron Life Sciences or give up 34.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Khiron Life Sciences
Performance |
| Timeline |
| Air New Zealand |
| Khiron Life Sciences |
Air New and Khiron Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Khiron Life
The main advantage of trading using opposite Air New and Khiron Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, Khiron Life 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 Khiron Life will offset losses from the drop in Khiron Life's long position.| Air New vs. JD SPORTS FASH | Air New vs. DAIRY FARM INTL | Air New vs. Federal Agricultural Mortgage | Air New vs. Hanison Construction Holdings |
| Khiron Life vs. Monster Beverage Corp | Khiron Life vs. Air New Zealand | Khiron Life vs. Fevertree Drinks PLC | Khiron Life vs. Alaska Air Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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