Correlation Between Air New and LABOCANNA
Can any of the company-specific risk be diversified away by investing in both Air New and LABOCANNA 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 LABOCANNA 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 LABOCANNA SA ZY 10, you can compare the effects of market volatilities on Air New and LABOCANNA 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 LABOCANNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and LABOCANNA.
Diversification Opportunities for Air New and LABOCANNA
Good diversification
The 3 months correlation between Air and LABOCANNA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and LABOCANNA SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LABOCANNA SA ZY 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 LABOCANNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LABOCANNA SA ZY has no effect on the direction of Air New i.e., Air New and LABOCANNA go up and down completely randomly.
Pair Corralation between Air New and LABOCANNA
Assuming the 90 days trading horizon Air New Zealand is expected to generate 0.65 times more return on investment than LABOCANNA. However, Air New Zealand is 1.55 times less risky than LABOCANNA. It trades about 0.1 of its potential returns per unit of risk. LABOCANNA SA ZY 10 is currently generating about -0.13 per unit of risk. If you would invest 30.00 in Air New Zealand on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Air New Zealand or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. LABOCANNA SA ZY 10
Performance |
| Timeline |
| Air New Zealand |
| LABOCANNA SA ZY |
Air New and LABOCANNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and LABOCANNA
The main advantage of trading using opposite Air New and LABOCANNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, LABOCANNA 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 LABOCANNA will offset losses from the drop in LABOCANNA's long position.The idea behind Air New Zealand and LABOCANNA SA ZY 10 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LABOCANNA vs. Tower One Wireless | LABOCANNA vs. FARO Technologies | LABOCANNA vs. Mitsui Chemicals | LABOCANNA vs. RCM TECHNOLOGIES |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |