Correlation Between Air Canada and PT Hexindo
Can any of the company-specific risk be diversified away by investing in both Air Canada and PT Hexindo 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 Air Canada and PT Hexindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Canada and PT Hexindo Adiperkasa, you can compare the effects of market volatilities on Air Canada and PT Hexindo 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 Air Canada with a short position of PT Hexindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and PT Hexindo.
Diversification Opportunities for Air Canada and PT Hexindo
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and HX1A is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and PT Hexindo Adiperkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hexindo Adiperkasa and Air Canada 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 Air Canada are associated (or correlated) with PT Hexindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hexindo Adiperkasa has no effect on the direction of Air Canada i.e., Air Canada and PT Hexindo go up and down completely randomly.
Pair Corralation between Air Canada and PT Hexindo
Assuming the 90 days trading horizon Air Canada is expected to generate 1.01 times less return on investment than PT Hexindo. But when comparing it to its historical volatility, Air Canada is 1.59 times less risky than PT Hexindo. It trades about 0.02 of its potential returns per unit of risk. PT Hexindo Adiperkasa is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 30.00 in PT Hexindo Adiperkasa on September 23, 2024 and sell it today you would lose (3.00) from holding PT Hexindo Adiperkasa or give up 10.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Air Canada vs. PT Hexindo Adiperkasa
Performance |
Timeline |
Air Canada |
PT Hexindo Adiperkasa |
Air Canada and PT Hexindo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Canada and PT Hexindo
The main advantage of trading using opposite Air Canada and PT Hexindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, PT Hexindo 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 PT Hexindo will offset losses from the drop in PT Hexindo's long position.Air Canada vs. FARO Technologies | Air Canada vs. ePlay Digital | Air Canada vs. KOOL2PLAY SA ZY | Air Canada vs. LG Display Co |
PT Hexindo vs. Ashtead Group plc | PT Hexindo vs. WillScot Mobile Mini | PT Hexindo vs. Avis Budget Group | PT Hexindo vs. Sixt SE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |