Correlation Between Corning Incorporated and American Aires
Can any of the company-specific risk be diversified away by investing in both Corning Incorporated and American Aires 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 Corning Incorporated and American Aires into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corning Incorporated and American Aires, you can compare the effects of market volatilities on Corning Incorporated and American Aires 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 Corning Incorporated with a short position of American Aires. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corning Incorporated and American Aires.
Diversification Opportunities for Corning Incorporated and American Aires
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Corning and American is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and American Aires in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Aires and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with American Aires. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Aires has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and American Aires go up and down completely randomly.
Pair Corralation between Corning Incorporated and American Aires
Considering the 90-day investment horizon Corning Incorporated is expected to generate 0.39 times more return on investment than American Aires. However, Corning Incorporated is 2.54 times less risky than American Aires. It trades about 0.15 of its potential returns per unit of risk. American Aires is currently generating about 0.04 per unit of risk. If you would invest 4,834 in Corning Incorporated on November 5, 2024 and sell it today you would earn a total of 374.00 from holding Corning Incorporated or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Corning Incorporated vs. American Aires
Performance |
| Timeline |
| Corning Incorporated |
| American Aires |
Corning Incorporated and American Aires Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corning Incorporated and American Aires
The main advantage of trading using opposite Corning Incorporated and American Aires positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corning Incorporated position performs unexpectedly, American Aires 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 American Aires will offset losses from the drop in American Aires' long position.| Corning Incorporated vs. OSI Systems | Corning Incorporated vs. Fabrinet | Corning Incorporated vs. Jabil Circuit | Corning Incorporated vs. Vicor |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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