Correlation Between Tat Techno and Air Industries
Can any of the company-specific risk be diversified away by investing in both Tat Techno and Air Industries 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 Tat Techno and Air Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tat Techno and Air Industries Group, you can compare the effects of market volatilities on Tat Techno and Air Industries 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 Tat Techno with a short position of Air Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tat Techno and Air Industries.
Diversification Opportunities for Tat Techno and Air Industries
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tat and Air is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and Air Industries Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Industries Group and Tat Techno 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 Tat Techno are associated (or correlated) with Air Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Industries Group has no effect on the direction of Tat Techno i.e., Tat Techno and Air Industries go up and down completely randomly.
Pair Corralation between Tat Techno and Air Industries
Given the investment horizon of 90 days Tat Techno is expected to generate 0.85 times more return on investment than Air Industries. However, Tat Techno is 1.18 times less risky than Air Industries. It trades about 0.13 of its potential returns per unit of risk. Air Industries Group is currently generating about -0.09 per unit of risk. If you would invest 1,834 in Tat Techno on August 30, 2024 and sell it today you would earn a total of 373.00 from holding Tat Techno or generate 20.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tat Techno vs. Air Industries Group
Performance |
| Timeline |
| Tat Techno |
| Air Industries Group |
Tat Techno and Air Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tat Techno and Air Industries
The main advantage of trading using opposite Tat Techno and Air Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tat Techno position performs unexpectedly, Air Industries 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 Industries will offset losses from the drop in Air Industries' long position.| Tat Techno vs. Novocure | Tat Techno vs. HubSpot | Tat Techno vs. DigitalOcean Holdings | Tat Techno vs. Appian Corp |
| Air Industries vs. SIFCO Industries | Air Industries vs. CPI Aerostructures | Air Industries vs. VSE Corporation | Air Industries vs. National Presto Industries |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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