Correlation Between Addentax Group and Air T

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

By analyzing existing cross correlation between Addentax Group Corp and Air T Inc, you can compare the effects of market volatilities on Addentax Group and Air T 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 Addentax Group with a short position of Air T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addentax Group and Air T.

Diversification Opportunities for Addentax Group and Air T

-0.61

Correlation Coefficient

Addentax Group  Air T

Excellent diversification

The 3 months correlation between Addentax and Air is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Addentax Group Corp and Air T Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air T Inc and Addentax Group 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 Addentax Group Corp are associated (or correlated) with Air T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air T Inc has no effect on the direction of Addentax Group i.e., Addentax Group and Air T go up and down completely randomly.

Pair Corralation between Addentax Group and Air T

Given the investment horizon of 90 days Addentax Group Corp is expected to generate 8.15 times more return on investment than Air T. However, Addentax Group is 8.15 times more volatile than Air T Inc. It trades about 0.0 of its potential returns per unit of risk. Air T Inc is currently generating about -0.17 per unit of risk. If you would invest  64.00  in Addentax Group Corp on October 4, 2024 and sell it today you would lose (2.70) from holding Addentax Group Corp or give up 4.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Addentax Group Corp  vs.  Air T Inc

Addentax Group Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Addentax Group Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Air T Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air T Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Air T is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Addentax Group and Air T

The main advantage of trading using opposite Addentax Group and Air T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addentax Group position performs unexpectedly, Air T 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 T will offset losses from the drop in Air T's long position.

The idea behind Addentax Group Corp and Air T Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.