Correlation Between Star Jets and Aeroports
Can any of the company-specific risk be diversified away by investing in both Star Jets and Aeroports 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 Star Jets and Aeroports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Jets International and Aeroports de Paris, you can compare the effects of market volatilities on Star Jets and Aeroports 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 Star Jets with a short position of Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Jets and Aeroports.
Diversification Opportunities for Star Jets and Aeroports
Very good diversification
The 3 months correlation between Star and Aeroports is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Star Jets International and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris and Star Jets 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 Star Jets International are associated (or correlated) with Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of Star Jets i.e., Star Jets and Aeroports go up and down completely randomly.
Pair Corralation between Star Jets and Aeroports
Given the investment horizon of 90 days Star Jets International is expected to generate 10.71 times more return on investment than Aeroports. However, Star Jets is 10.71 times more volatile than Aeroports de Paris. It trades about 0.11 of its potential returns per unit of risk. Aeroports de Paris is currently generating about 0.01 per unit of risk. If you would invest 1.75 in Star Jets International on September 12, 2024 and sell it today you would lose (0.07) from holding Star Jets International or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 53.03% |
| Values | Daily Returns |
Star Jets International vs. Aeroports de Paris
Performance |
| Timeline |
| Star Jets International |
| Aeroports de Paris |
Star Jets and Aeroports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Jets and Aeroports
The main advantage of trading using opposite Star Jets and Aeroports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Jets position performs unexpectedly, Aeroports 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 Aeroports will offset losses from the drop in Aeroports' long position.| Star Jets vs. Aeroports de Paris | Star Jets vs. Aena SME SA | Star Jets vs. Aena SME SA | Star Jets vs. Airports of Thailand |
| Aeroports vs. Auckland International Airport | Aeroports vs. Aena SME SA | Aeroports vs. Aena SME SA | Aeroports vs. Airports of Thailand |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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