Correlation Between Transport International and Air Transport
Can any of the company-specific risk be diversified away by investing in both Transport International 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 Transport International and Air Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and Air Transport Services, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Air Transport.
Diversification Opportunities for Transport International and Air Transport
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Transport and Air is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin 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 Transport International 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 Transport International Holdings 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 Transport International i.e., Transport International and Air Transport go up and down completely randomly.
Pair Corralation between Transport International and Air Transport
Assuming the 90 days horizon Transport International Holdings is expected to generate 1.65 times more return on investment than Air Transport. However, Transport International is 1.65 times more volatile than Air Transport Services. It trades about 0.07 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.0 per unit of risk. If you would invest 26.00 in Transport International Holdings on August 26, 2024 and sell it today you would earn a total of 69.00 from holding Transport International Holdings or generate 265.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. Air Transport Services
Performance |
| Timeline |
| Transport International |
| Air Transport Services |
Transport International and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Air Transport
The main advantage of trading using opposite Transport International and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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.| Transport International vs. Westinghouse Air Brake | Transport International vs. Superior Plus Corp | Transport International vs. NMI Holdings | Transport International vs. Origin Agritech |
| Air Transport vs. OURGAME INTHOLDL 00005 | Air Transport vs. Penn National Gaming | Air Transport vs. Games Workshop Group | Air Transport vs. PENN NATL GAMING |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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