Correlation Between Airtac International and Jean

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Can any of the company-specific risk be diversified away by investing in both Airtac International and Jean 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 Airtac International and Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airtac International Group and Jean Co, you can compare the effects of market volatilities on Airtac International and Jean 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 Airtac International with a short position of Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtac International and Jean.

Diversification Opportunities for Airtac International and Jean

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Airtac and Jean is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Airtac International Group and Jean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jean and Airtac International 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 Airtac International Group are associated (or correlated) with Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jean has no effect on the direction of Airtac International i.e., Airtac International and Jean go up and down completely randomly.

Pair Corralation between Airtac International and Jean

Assuming the 90 days trading horizon Airtac International Group is expected to generate 1.1 times more return on investment than Jean. However, Airtac International is 1.1 times more volatile than Jean Co. It trades about 0.13 of its potential returns per unit of risk. Jean Co is currently generating about -0.08 per unit of risk. If you would invest  79,100  in Airtac International Group on October 1, 2024 and sell it today you would earn a total of  4,800  from holding Airtac International Group or generate 6.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Airtac International Group  vs.  Jean Co

 Performance 
       Timeline  
Airtac International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Airtac International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
Jean 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jean Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Airtac International and Jean Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Airtac International and Jean

The main advantage of trading using opposite Airtac International and Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airtac International position performs unexpectedly, Jean 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 Jean will offset losses from the drop in Jean's long position.
The idea behind Airtac International Group and Jean Co 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.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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