Correlation Between Air New and PT Barito
Can any of the company-specific risk be diversified away by investing in both Air New and PT Barito 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 PT Barito 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 PT Barito Pacific, you can compare the effects of market volatilities on Air New and PT Barito 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 PT Barito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and PT Barito.
Diversification Opportunities for Air New and PT Barito
Pay attention - limited upside
The 3 months correlation between Air and OB8 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and PT Barito Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Barito Pacific 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 PT Barito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Barito Pacific has no effect on the direction of Air New i.e., Air New and PT Barito go up and down completely randomly.
Pair Corralation between Air New and PT Barito
Assuming the 90 days trading horizon Air New Zealand is expected to generate 0.54 times more return on investment than PT Barito. However, Air New Zealand is 1.86 times less risky than PT Barito. It trades about 0.08 of its potential returns per unit of risk. PT Barito Pacific is currently generating about 0.0 per unit of risk. If you would invest 33.00 in Air New Zealand on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Air New Zealand or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Air New Zealand vs. PT Barito Pacific
Performance |
| Timeline |
| Air New Zealand |
| PT Barito Pacific |
Air New and PT Barito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and PT Barito
The main advantage of trading using opposite Air New and PT Barito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New position performs unexpectedly, PT Barito 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 PT Barito will offset losses from the drop in PT Barito's long position.| Air New vs. CARSALESCOM | Air New vs. SPORT LISBOA E | Air New vs. H2O Retailing | Air New vs. Columbia Sportswear |
| PT Barito vs. Japan Medical Dynamic | PT Barito vs. CREO MEDICAL GRP | PT Barito vs. Tsingtao Brewery | PT Barito vs. Merit Medical Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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