Correlation Between De Licacy and Airmate Cayman

Can any of the company-specific risk be diversified away by investing in both De Licacy and Airmate Cayman 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 De Licacy and Airmate Cayman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between De Licacy Industrial and Airmate Cayman International, you can compare the effects of market volatilities on De Licacy and Airmate Cayman 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 De Licacy with a short position of Airmate Cayman. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Licacy and Airmate Cayman.

Diversification Opportunities for De Licacy and Airmate Cayman

0.31

Correlation Coefficient

De Licacy  Airmate Cayman

Weak diversification

The 3 months correlation between 1464 and Airmate is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding De Licacy Industrial and Airmate Cayman International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airmate Cayman Inter and De Licacy 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 De Licacy Industrial are associated (or correlated) with Airmate Cayman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airmate Cayman Inter has no effect on the direction of De Licacy i.e., De Licacy and Airmate Cayman go up and down completely randomly.

Pair Corralation between De Licacy and Airmate Cayman

Assuming the 90 days trading horizon De Licacy Industrial is expected to generate 1.9 times more return on investment than Airmate Cayman. However, De Licacy is 1.9 times more volatile than Airmate Cayman International. It trades about 0.08 of its potential returns per unit of risk. Airmate Cayman International is currently generating about 0.0 per unit of risk. If you would invest  1,670  in De Licacy Industrial on December 21, 2024 and sell it today you would earn a total of  125.00  from holding De Licacy Industrial or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

De Licacy Industrial  vs.  Airmate Cayman International

De Licacy Industrial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in De Licacy Industrial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, De Licacy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Airmate Cayman Inter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Airmate Cayman International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Airmate Cayman is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with De Licacy and Airmate Cayman

The main advantage of trading using opposite De Licacy and Airmate Cayman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Licacy position performs unexpectedly, Airmate Cayman 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 Airmate Cayman will offset losses from the drop in Airmate Cayman's long position.

The idea behind De Licacy Industrial and Airmate Cayman International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.