Correlation Between Stelar Metals and Air New
Can any of the company-specific risk be diversified away by investing in both Stelar Metals 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 Stelar Metals and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Air New Zealand, you can compare the effects of market volatilities on Stelar Metals 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 Stelar Metals with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Air New.
Diversification Opportunities for Stelar Metals and Air New
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stelar and Air is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stelar 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 Stelar Metals 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 Stelar 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 Stelar Metals i.e., Stelar Metals and Air New go up and down completely randomly.
Pair Corralation between Stelar Metals and Air New
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Air New. In addition to that, Stelar Metals is 3.7 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 -0.02 per unit of volatility. If you would invest 65.00 in Air New Zealand on November 27, 2024 and sell it today you would lose (11.00) from holding Air New Zealand or give up 16.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Air New Zealand
Performance |
| Timeline |
| Stelar Metals |
| Air New Zealand |
Stelar Metals and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Air New
The main advantage of trading using opposite Stelar Metals and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals 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.| Stelar Metals vs. Auctus Alternative Investments | Stelar Metals vs. Australian Strategic Materials | Stelar Metals vs. Hotel Property Investments | Stelar Metals vs. Alternative Investment Trust |
| Air New vs. ARN Media Limited | Air New vs. Aurelia Metals | Air New vs. Truscott Mining Corp | Air New vs. COAST ENTERTAINMENT HOLDINGS |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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