Correlation Between Air New and Unibail Rodamco

Can any of the company-specific risk be diversified away by investing in both Air New and Unibail Rodamco 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 New and Unibail Rodamco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Air New Zealand and Unibail Rodamco Westfield SE, you can compare the effects of market volatilities on Air New and Unibail Rodamco 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 New with a short position of Unibail Rodamco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Unibail Rodamco.

Diversification Opportunities for Air New and Unibail Rodamco

-0.2

Correlation Coefficient

Air New  Unibail Rodamco

Good diversification

The 3 months correlation between Air and Unibail is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Unibail Rodamco Westfield SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibail Rodamco West and Air New 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 New Zealand are associated (or correlated) with Unibail Rodamco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibail Rodamco West has no effect on the direction of Air New i.e., Air New and Unibail Rodamco go up and down completely randomly.

Pair Corralation between Air New and Unibail Rodamco

Assuming the 90 days trading horizon Air New Zealand is expected to under-perform the Unibail Rodamco. But the stock apears to be less risky and, when comparing its historical volatility, Air New Zealand is 1.29 times less risky than Unibail Rodamco. The stock trades about -0.02 of its potential returns per unit of risk. The Unibail Rodamco Westfield SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  441.00  in Unibail Rodamco Westfield SE on October 10, 2024 and sell it today you would earn a total of  179.00  from holding Unibail Rodamco Westfield SE or generate 40.59% return on investment over 90 days.

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

Air New Zealand  vs.  Unibail Rodamco Westfield SE

Air New Zealand

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air New Zealand are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Air New unveiled solid returns over the last few months and may actually be approaching a breakup point.

Unibail Rodamco West

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unibail Rodamco Westfield SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Unibail Rodamco is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Air New and Unibail Rodamco

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

The idea behind Air New Zealand and Unibail Rodamco Westfield SE 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.