Correlation Between Clime Investment and Air New
Can any of the company-specific risk be diversified away by investing in both Clime Investment 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 Clime Investment and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clime Investment Management and Air New Zealand, you can compare the effects of market volatilities on Clime Investment 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 Clime Investment with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clime Investment and Air New.
Diversification Opportunities for Clime Investment and Air New
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clime and Air is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management 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 Clime Investment 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 Clime Investment Management 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 Clime Investment i.e., Clime Investment and Air New go up and down completely randomly.
Pair Corralation between Clime Investment and Air New
Assuming the 90 days trading horizon Clime Investment Management is expected to under-perform the Air New. In addition to that, Clime Investment is 1.72 times more volatile than Air New Zealand. It trades about -0.02 of its total potential returns per unit of risk. Air New Zealand is currently generating about -0.03 per unit of volatility. If you would invest 64.00 in Air New Zealand on September 1, 2024 and sell it today you would lose (13.00) from holding Air New Zealand or give up 20.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clime Investment Management vs. Air New Zealand
Performance |
| Timeline |
| Clime Investment Man |
| Air New Zealand |
Clime Investment and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clime Investment and Air New
The main advantage of trading using opposite Clime Investment and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment 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.| Clime Investment vs. WA1 Resources | Clime Investment vs. Predictive Discovery | Clime Investment vs. Cooper Metals | Clime Investment vs. OD6 Metals |
| Air New vs. Carlton Investments | Air New vs. Auctus Alternative Investments | Air New vs. Diversified United Investment | Air New vs. REGAL ASIAN INVESTMENTS |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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