Correlation Between Globaltek Fabrication and Airtac International

Can any of the company-specific risk be diversified away by investing in both Globaltek Fabrication and Airtac International 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 Globaltek Fabrication and Airtac International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globaltek Fabrication Co and Airtac International Group, you can compare the effects of market volatilities on Globaltek Fabrication and Airtac International 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 Globaltek Fabrication with a short position of Airtac International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globaltek Fabrication and Airtac International.

Diversification Opportunities for Globaltek Fabrication and Airtac International

0.02

Correlation Coefficient

Globaltek Fabrication  Airtac International

Significant diversification

The 3 months correlation between Globaltek and Airtac is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Globaltek Fabrication Co and Airtac International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtac International and Globaltek Fabrication 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 Globaltek Fabrication Co are associated (or correlated) with Airtac International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtac International has no effect on the direction of Globaltek Fabrication i.e., Globaltek Fabrication and Airtac International go up and down completely randomly.

Pair Corralation between Globaltek Fabrication and Airtac International

Assuming the 90 days trading horizon Globaltek Fabrication is expected to generate 4.54 times less return on investment than Airtac International. In addition to that, Globaltek Fabrication is 1.32 times more volatile than Airtac International Group. It trades about 0.01 of its total potential returns per unit of risk. Airtac International Group is currently generating about 0.08 per unit of volatility. If you would invest  83,900  in Airtac International Group on December 25, 2024 and sell it today you would earn a total of  7,400  from holding Airtac International Group or generate 8.82% return on investment over 90 days.

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

Globaltek Fabrication Co  vs.  Airtac International Group

Globaltek Fabrication

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Globaltek Fabrication Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Globaltek Fabrication is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Airtac International

Risk-Adjusted Performance

Modest

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

Pair Trading with Globaltek Fabrication and Airtac International

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

The idea behind Globaltek Fabrication Co and Airtac International Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.