Correlation Between Air Transport and Ming Le
Can any of the company-specific risk be diversified away by investing in both Air Transport and Ming Le 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 Transport and Ming Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Ming Le Sports, you can compare the effects of market volatilities on Air Transport and Ming Le 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 Transport with a short position of Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Ming Le.
Diversification Opportunities for Air Transport and Ming Le
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Ming is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports and Air Transport 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 Transport Services are associated (or correlated) with Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Air Transport i.e., Air Transport and Ming Le go up and down completely randomly.
Pair Corralation between Air Transport and Ming Le
Assuming the 90 days horizon Air Transport Services is expected to generate 1.0 times more return on investment than Ming Le. However, Air Transport is 1.0 times more volatile than Ming Le Sports. It trades about 0.02 of its potential returns per unit of risk. Ming Le Sports is currently generating about 0.01 per unit of risk. If you would invest 1,970 in Air Transport Services on December 2, 2024 and sell it today you would earn a total of 170.00 from holding Air Transport Services or generate 8.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Air Transport Services vs. Ming Le Sports
Performance |
Timeline |
Air Transport Services |
Ming Le Sports |
Air Transport and Ming Le Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Transport and Ming Le
The main advantage of trading using opposite Air Transport and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.Air Transport vs. Ribbon Communications | Air Transport vs. GMO INTERNET | Air Transport vs. Platinum Investment Management | Air Transport vs. Computershare Limited |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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