Correlation Between MA Financial and Air New
Can any of the company-specific risk be diversified away by investing in both MA Financial 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 MA Financial and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MA Financial Group and Air New Zealand, you can compare the effects of market volatilities on MA Financial 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 MA Financial with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and Air New.
Diversification Opportunities for MA Financial and Air New
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAF and Air is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial 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 MA Financial 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 MA Financial 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 MA Financial i.e., MA Financial and Air New go up and down completely randomly.
Pair Corralation between MA Financial and Air New
Assuming the 90 days trading horizon MA Financial is expected to generate 4.03 times less return on investment than Air New. In addition to that, MA Financial is 1.61 times more volatile than Air New Zealand. It trades about 0.02 of its total potential returns per unit of risk. Air New Zealand is currently generating about 0.15 per unit of volatility. If you would invest 48.00 in Air New Zealand on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Air New Zealand or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. Air New Zealand
Performance |
| Timeline |
| MA Financial Group |
| Air New Zealand |
MA Financial and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and Air New
The main advantage of trading using opposite MA Financial and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial 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.| MA Financial vs. Renascor Resources | MA Financial vs. Venus Metals | MA Financial vs. Havilah Resources | MA Financial vs. Asara Resources |
| Air New vs. Macquarie Group | Air New vs. Macquarie Group Ltd | Air New vs. Commonwealth Bank | Air New vs. Rio Tinto |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |