Correlation Between FARM 51 and Air Transport
Can any of the company-specific risk be diversified away by investing in both FARM 51 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 FARM 51 and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and Air Transport Services, you can compare the effects of market volatilities on FARM 51 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 FARM 51 with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Air Transport.
Diversification Opportunities for FARM 51 and Air Transport
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FARM and Air is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP 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 FARM 51 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 FARM 51 GROUP 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 FARM 51 i.e., FARM 51 and Air Transport go up and down completely randomly.
Pair Corralation between FARM 51 and Air Transport
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 5.02 times more return on investment than Air Transport. However, FARM 51 is 5.02 times more volatile than Air Transport Services. It trades about 0.03 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.05 per unit of risk. If you would invest 302.00 in FARM 51 GROUP on October 26, 2024 and sell it today you would earn a total of 5.00 from holding FARM 51 GROUP or generate 1.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FARM 51 GROUP vs. Air Transport Services
Performance |
Timeline |
FARM 51 GROUP |
Air Transport Services |
FARM 51 and Air Transport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FARM 51 and Air Transport
The main advantage of trading using opposite FARM 51 and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 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.FARM 51 vs. GEAR4MUSIC LS 10 | FARM 51 vs. BANKINTER ADR 2007 | FARM 51 vs. Check Point Software | FARM 51 vs. Kingdee International Software |
Air Transport vs. Teradata Corp | Air Transport vs. DICKER DATA LTD | Air Transport vs. Meta Financial Group | Air Transport vs. CullenFrost Bankers |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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