Correlation Between Japan Airport and Saker Aviation

Can any of the company-specific risk be diversified away by investing in both Japan Airport and Saker Aviation 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 Japan Airport and Saker Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Japan Airport Terminal and Saker Aviation Services, you can compare the effects of market volatilities on Japan Airport and Saker Aviation 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 Japan Airport with a short position of Saker Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Airport and Saker Aviation.

Diversification Opportunities for Japan Airport and Saker Aviation

0.0

Correlation Coefficient

Japan Airport  Saker Aviation

Pay attention - limited upside

The 3 months correlation between Japan and Saker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Japan Airport Terminal and Saker Aviation Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saker Aviation Services and Japan Airport 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 Japan Airport Terminal are associated (or correlated) with Saker Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saker Aviation Services has no effect on the direction of Japan Airport i.e., Japan Airport and Saker Aviation go up and down completely randomly.

Pair Corralation between Japan Airport and Saker Aviation

Assuming the 90 days horizon Japan Airport Terminal is expected to under-perform the Saker Aviation. But the pink sheet apears to be less risky and, when comparing its historical volatility, Japan Airport Terminal is 1.38 times less risky than Saker Aviation. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Saker Aviation Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  728.00  in Saker Aviation Services on December 28, 2024 and sell it today you would earn a total of  34.00  from holding Saker Aviation Services or generate 4.67% return on investment over 90 days.

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

Japan Airport Terminal  vs.  Saker Aviation Services

Japan Airport Terminal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Japan Airport Terminal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Saker Aviation Services

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Saker Aviation Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Saker Aviation may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Japan Airport and Saker Aviation

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

The idea behind Japan Airport Terminal and Saker Aviation Services 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.