Correlation Between Ingenia Communities and Air New
Can any of the company-specific risk be diversified away by investing in both Ingenia Communities and Air New 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 Ingenia Communities and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingenia Communities Group and Air New Zealand, you can compare the effects of market volatilities on Ingenia Communities and Air New 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 Ingenia Communities with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingenia Communities and Air New.
Diversification Opportunities for Ingenia Communities and Air New
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingenia and Air is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ingenia Communities Group and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and Ingenia Communities 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 Ingenia Communities Group are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Ingenia Communities i.e., Ingenia Communities and Air New go up and down completely randomly.
Pair Corralation between Ingenia Communities and Air New
Assuming the 90 days trading horizon Ingenia Communities Group is expected to generate 1.29 times more return on investment than Air New. However, Ingenia Communities is 1.29 times more volatile than Air New Zealand. It trades about 0.03 of its potential returns per unit of risk. Air New Zealand is currently generating about -0.03 per unit of risk. If you would invest 418.00 in Ingenia Communities Group on September 4, 2024 and sell it today you would earn a total of 85.00 from holding Ingenia Communities Group or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingenia Communities Group vs. Air New Zealand
Performance |
| Timeline |
| Ingenia Communities |
| Air New Zealand |
Ingenia Communities and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingenia Communities and Air New
The main advantage of trading using opposite Ingenia Communities and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingenia Communities position performs unexpectedly, Air New 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 New will offset losses from the drop in Air New's long position.| Ingenia Communities vs. Air New Zealand | Ingenia Communities vs. Regis Healthcare | Ingenia Communities vs. Farm Pride Foods | Ingenia Communities vs. Actinogen Medical |
| Air New vs. Aneka Tambang Tbk | Air New vs. Macquarie Group | Air New vs. Macquarie Group Ltd | Air New vs. Challenger |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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