Correlation Between Airport City and Prashkovsky
Can any of the company-specific risk be diversified away by investing in both Airport City and Prashkovsky 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 Airport City and Prashkovsky into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Airport City and Prashkovsky, you can compare the effects of market volatilities on Airport City and Prashkovsky 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 Airport City with a short position of Prashkovsky. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airport City and Prashkovsky.
Diversification Opportunities for Airport City and Prashkovsky
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Airport and Prashkovsky is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Airport City and Prashkovsky in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prashkovsky and Airport City 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 Airport City are associated (or correlated) with Prashkovsky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prashkovsky has no effect on the direction of Airport City i.e., Airport City and Prashkovsky go up and down completely randomly.
Pair Corralation between Airport City and Prashkovsky
Assuming the 90 days trading horizon Airport City is expected to generate 1.12 times more return on investment than Prashkovsky. However, Airport City is 1.12 times more volatile than Prashkovsky. It trades about -0.19 of its potential returns per unit of risk. Prashkovsky is currently generating about -0.3 per unit of risk. If you would invest 606,400 in Airport City on January 20, 2024 and sell it today you would lose (47,300) from holding Airport City or give up 7.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Airport City vs. Prashkovsky
Performance |
| Timeline |
| Airport City |
| Prashkovsky |
Airport City and Prashkovsky Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Airport City and Prashkovsky
The main advantage of trading using opposite Airport City and Prashkovsky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Airport City position performs unexpectedly, Prashkovsky 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 Prashkovsky will offset losses from the drop in Prashkovsky's long position.| Airport City vs. Migdal Insurance | Airport City vs. The Phoenix Holdings | Airport City vs. Harel Insurance Investments | Airport City vs. Clal Insurance Enterprises |
| Prashkovsky vs. Migdal Insurance | Prashkovsky vs. The Phoenix Holdings | Prashkovsky vs. Harel Insurance Investments | Prashkovsky vs. Clal Insurance Enterprises |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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