Correlation Between GOLD ROAD and Air Transport
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and Air Transport 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 GOLD ROAD and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and Air Transport Services, you can compare the effects of market volatilities on GOLD ROAD and Air Transport 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 GOLD ROAD with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Air Transport.
Diversification Opportunities for GOLD ROAD and Air Transport
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GOLD and Air is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services and GOLD ROAD 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 GOLD ROAD RES are associated (or correlated) with Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and Air Transport go up and down completely randomly.
Pair Corralation between GOLD ROAD and Air Transport
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.92 times more return on investment than Air Transport. However, GOLD ROAD RES is 1.09 times less risky than Air Transport. It trades about 0.03 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.01 per unit of risk. If you would invest 97.00 in GOLD ROAD RES on September 1, 2024 and sell it today you would earn a total of 16.00 from holding GOLD ROAD RES or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. Air Transport Services
Performance |
| Timeline |
| GOLD ROAD RES |
| Air Transport Services |
GOLD ROAD and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and Air Transport
The main advantage of trading using opposite GOLD ROAD and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD position performs unexpectedly, Air Transport 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 Transport will offset losses from the drop in Air Transport's long position.| GOLD ROAD vs. ACCSYS TECHPLC EO | GOLD ROAD vs. Align Technology | GOLD ROAD vs. AAC TECHNOLOGHLDGADR | GOLD ROAD vs. ORMAT TECHNOLOGIES |
| Air Transport vs. Digilife Technologies Limited | Air Transport vs. COMBA TELECOM SYST | Air Transport vs. Singapore Telecommunications Limited | Air Transport vs. Chunghwa Telecom Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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