Correlation Between EasyJet Plc and ANA Holdings
Can any of the company-specific risk be diversified away by investing in both EasyJet Plc and ANA Holdings 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 EasyJet Plc and ANA Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between easyJet plc and ANA Holdings ADR, you can compare the effects of market volatilities on EasyJet Plc and ANA Holdings 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 EasyJet Plc with a short position of ANA Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of EasyJet Plc and ANA Holdings.
Diversification Opportunities for EasyJet Plc and ANA Holdings
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EasyJet and ANA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding easyJet plc and ANA Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANA Holdings ADR and EasyJet Plc 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 easyJet plc are associated (or correlated) with ANA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANA Holdings ADR has no effect on the direction of EasyJet Plc i.e., EasyJet Plc and ANA Holdings go up and down completely randomly.
Pair Corralation between EasyJet Plc and ANA Holdings
Assuming the 90 days horizon easyJet plc is expected to under-perform the ANA Holdings. But the otc stock apears to be less risky and, when comparing its historical volatility, easyJet plc is 1.88 times less risky than ANA Holdings. The otc stock trades about -0.23 of its potential returns per unit of risk. The ANA Holdings ADR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 385.00 in ANA Holdings ADR on August 27, 2024 and sell it today you would earn a total of 3.00 from holding ANA Holdings ADR or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
easyJet plc vs. ANA Holdings ADR
Performance |
| Timeline |
| easyJet plc |
| ANA Holdings ADR |
EasyJet Plc and ANA Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EasyJet Plc and ANA Holdings
The main advantage of trading using opposite EasyJet Plc and ANA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EasyJet Plc position performs unexpectedly, ANA Holdings 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 ANA Holdings will offset losses from the drop in ANA Holdings' long position.| EasyJet Plc vs. Finnair Oyj | EasyJet Plc vs. Norse Atlantic ASA | EasyJet Plc vs. Air New Zealand | EasyJet Plc vs. Air China Limited |
| ANA Holdings vs. Cathay Pacific Airways | ANA Holdings vs. Air China Ltd | ANA Holdings vs. Ajinomoto Co ADR | ANA Holdings vs. Qantas Airways Ltd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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