Correlation Between Airtac International and MetaTech

Can any of the company-specific risk be diversified away by investing in both Airtac International and MetaTech 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 MetaTech 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 MetaTech AP, you can compare the effects of market volatilities on Airtac International and MetaTech 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 MetaTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtac International and MetaTech.

Diversification Opportunities for Airtac International and MetaTech

-0.49

Correlation Coefficient

Airtac International  MetaTech

Very good diversification

The 3 months correlation between Airtac and MetaTech is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Airtac International Group and MetaTech AP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetaTech AP 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 MetaTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetaTech AP has no effect on the direction of Airtac International i.e., Airtac International and MetaTech go up and down completely randomly.

Pair Corralation between Airtac International and MetaTech

Assuming the 90 days trading horizon Airtac International Group is expected to under-perform the MetaTech. In addition to that, Airtac International is 2.52 times more volatile than MetaTech AP. It trades about -0.08 of its total potential returns per unit of risk. MetaTech AP is currently generating about 0.19 per unit of volatility. If you would invest  4,990  in MetaTech AP on September 23, 2024 and sell it today you would earn a total of  190.00  from holding MetaTech AP or generate 3.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Airtac International Group  vs.  MetaTech AP

Airtac International

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, Airtac International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

MetaTech AP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MetaTech AP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, MetaTech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Airtac International and MetaTech

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

The idea behind Airtac International Group and MetaTech AP 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..