Correlation Between Minerals Technologies and Air France
Can any of the company-specific risk be diversified away by investing in both Minerals Technologies and Air France 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 Minerals Technologies and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and Air France KLM, you can compare the effects of market volatilities on Minerals Technologies and Air France 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 Minerals Technologies with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and Air France.
Diversification Opportunities for Minerals Technologies and Air France
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Minerals and Air is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and Air France KLM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and Air France go up and down completely randomly.
Pair Corralation between Minerals Technologies and Air France
Considering the 90-day investment horizon Minerals Technologies is expected to generate 0.93 times more return on investment than Air France. However, Minerals Technologies is 1.08 times less risky than Air France. It trades about 0.12 of its potential returns per unit of risk. Air France KLM is currently generating about -0.33 per unit of risk. If you would invest 7,646 in Minerals Technologies on August 31, 2024 and sell it today you would earn a total of 467.00 from holding Minerals Technologies or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minerals Technologies vs. Air France KLM
Performance |
| Timeline |
| Minerals Technologies |
| Air France KLM |
Minerals Technologies and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerals Technologies and Air France
The main advantage of trading using opposite Minerals Technologies and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies position performs unexpectedly, Air France 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 France will offset losses from the drop in Air France's long position.| Minerals Technologies vs. Quaker Chemical | Minerals Technologies vs. Innospec | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Cabot |
| Air France vs. Seychelle Environmtl | Air France vs. Energy and Water | Air France vs. One World Universe | Air France vs. Vow ASA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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