Correlation Between Cebu Air and Air New
Can any of the company-specific risk be diversified away by investing in both Cebu Air 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 Cebu Air and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air and Air New Zealand, you can compare the effects of market volatilities on Cebu Air 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 Cebu Air with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Air New.
Diversification Opportunities for Cebu Air and Air New
Pay attention - limited upside
The 3 months correlation between Cebu and Air is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air 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 Cebu Air 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 Cebu Air 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 Cebu Air i.e., Cebu Air and Air New go up and down completely randomly.
Pair Corralation between Cebu Air and Air New
If you would invest 1.20 in Cebu Air on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Cebu Air or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cebu Air vs. Air New Zealand
Performance |
| Timeline |
| Cebu Air |
| Air New Zealand |
Cebu Air and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Air New
The main advantage of trading using opposite Cebu Air and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air 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.| Cebu Air vs. Air France KLM SA | Cebu Air vs. easyJet plc | Cebu Air vs. Norse Atlantic ASA | Cebu Air vs. Air China Limited |
| Air New vs. AirAsia Group Berhad | Air New vs. ANA Holdings ADR | Air New vs. Air France KLM SA | Air New vs. Cebu Air |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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