Correlation Between Patriot Battery and Air New
Can any of the company-specific risk be diversified away by investing in both Patriot Battery 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 Patriot Battery and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patriot Battery Metals and Air New Zealand, you can compare the effects of market volatilities on Patriot Battery 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 Patriot Battery with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patriot Battery and Air New.
Diversification Opportunities for Patriot Battery and Air New
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Patriot and Air is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Patriot Battery Metals 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 Patriot Battery 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 Patriot Battery Metals 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 Patriot Battery i.e., Patriot Battery and Air New go up and down completely randomly.
Pair Corralation between Patriot Battery and Air New
Assuming the 90 days trading horizon Patriot Battery Metals is expected to generate 5.11 times more return on investment than Air New. However, Patriot Battery is 5.11 times more volatile than Air New Zealand. It trades about 0.0 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 69.00 in Patriot Battery Metals on August 26, 2024 and sell it today you would lose (42.00) from holding Patriot Battery Metals or give up 60.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Patriot Battery Metals vs. Air New Zealand
Performance |
| Timeline |
| Patriot Battery Metals |
| Air New Zealand |
Patriot Battery and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patriot Battery and Air New
The main advantage of trading using opposite Patriot Battery and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patriot Battery 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.| Patriot Battery vs. Air New Zealand | Patriot Battery vs. Stelar Metals | Patriot Battery vs. Aeon Metals | Patriot Battery vs. Alto Metals |
| Air New vs. Singular Health Group | Air New vs. Richmond Vanadium Technology | Air New vs. Global Health | Air New vs. Macquarie Technology Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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