Correlation Between Hub and Air T
Can any of the company-specific risk be diversified away by investing in both Hub and Air T 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 Hub and Air T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hub Group and Air T Inc, you can compare the effects of market volatilities on Hub and Air T 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 Hub with a short position of Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hub and Air T.
Diversification Opportunities for Hub and Air T
Good diversification
The 3 months correlation between Hub and Air is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hub Group and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc and Hub 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 Hub Group are associated (or correlated) with Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of Hub i.e., Hub and Air T go up and down completely randomly.
Pair Corralation between Hub and Air T
Given the investment horizon of 90 days Hub Group is expected to generate 0.45 times more return on investment than Air T. However, Hub Group is 2.24 times less risky than Air T. It trades about 0.04 of its potential returns per unit of risk. Air T Inc is currently generating about 0.01 per unit of risk. If you would invest 3,896 in Hub Group on August 24, 2024 and sell it today you would earn a total of 1,099 from holding Hub Group or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hub Group vs. Air T Inc
Performance |
| Timeline |
| Hub Group |
| Air T Inc |
Hub and Air T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hub and Air T
The main advantage of trading using opposite Hub and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hub position performs unexpectedly, Air T 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 T will offset losses from the drop in Air T's long position.| Hub vs. Landstar System | Hub vs. JB Hunt Transport | Hub vs. Expeditors International of | Hub vs. CH Robinson Worldwide |
| Air T vs. Addentax Group Corp | Air T vs. Hub Group | Air T vs. Landstar System | Air T vs. JB Hunt Transport |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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