Correlation Between Air Transport and Top KingWin

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

Diversification Opportunities for Air Transport and Top KingWin

-0.12

Correlation Coefficient

Air Transport  Top KingWin

Good diversification

The 3 months correlation between Air and Top is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Top KingWin Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Air Transport i.e., Air Transport and Top KingWin go up and down completely randomly.

Pair Corralation between Air Transport and Top KingWin

Given the investment horizon of 90 days Air Transport Services is expected to under-perform the Top KingWin. But the stock apears to be less risky and, when comparing its historical volatility, Air Transport Services is 48.95 times less risky than Top KingWin. The stock trades about -0.07 of its potential returns per unit of risk. The Top KingWin Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  49.00  in Top KingWin Ltd on September 14, 2024 and sell it today you would lose (10.00) from holding Top KingWin Ltd or give up 20.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Air Transport Services  vs.  Top KingWin Ltd

Air Transport Services

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Transport Services are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Air Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Top KingWin

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Top KingWin Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward-looking indicators, Top KingWin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Air Transport and Top KingWin

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

The idea behind Air Transport Services and Top KingWin Ltd 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 Global Correlations module to find global opportunities by holding instruments from different markets.