Correlation Between Saker Aviation and Aeroports

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

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

Diversification Opportunities for Saker Aviation and Aeroports

0.34

Correlation Coefficient

Saker Aviation  Aeroports

Weak diversification

The 3 months correlation between Saker and Aeroports is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Saker Aviation Services and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris and Saker Aviation 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 Saker Aviation Services are associated (or correlated) with Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of Saker Aviation i.e., Saker Aviation and Aeroports go up and down completely randomly.

Pair Corralation between Saker Aviation and Aeroports

Given the investment horizon of 90 days Saker Aviation Services is expected to generate 1.27 times more return on investment than Aeroports. However, Saker Aviation is 1.27 times more volatile than Aeroports de Paris. It trades about 0.05 of its potential returns per unit of risk. Aeroports de Paris is currently generating about -0.11 per unit of risk. If you would invest  728.00  in Saker Aviation Services on December 29, 2024 and sell it today you would earn a total of  42.00  from holding Saker Aviation Services or generate 5.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Saker Aviation Services  vs.  Aeroports de Paris

Saker Aviation Services

Risk-Adjusted Performance

Insignificant

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.

Aeroports de Paris

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Saker Aviation and Aeroports

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

The idea behind Saker Aviation Services and Aeroports de Paris 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.