Correlation Between Swancor Holding and Airtac International

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

By analyzing existing cross correlation between Swancor Holding Co and Airtac International Group, you can compare the effects of market volatilities on Swancor Holding and Airtac International 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 Swancor Holding with a short position of Airtac International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swancor Holding and Airtac International.

Diversification Opportunities for Swancor Holding and Airtac International

0.24

Correlation Coefficient

Swancor Holding  Airtac International

Modest diversification

The 3 months correlation between Swancor and Airtac is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Swancor Holding Co and Airtac International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtac International and Swancor Holding 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 Swancor Holding Co are associated (or correlated) with Airtac International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtac International has no effect on the direction of Swancor Holding i.e., Swancor Holding and Airtac International go up and down completely randomly.

Pair Corralation between Swancor Holding and Airtac International

Assuming the 90 days trading horizon Swancor Holding Co is expected to generate 1.43 times more return on investment than Airtac International. However, Swancor Holding is 1.43 times more volatile than Airtac International Group. It trades about 0.23 of its potential returns per unit of risk. Airtac International Group is currently generating about 0.1 per unit of risk. If you would invest  12,900  in Swancor Holding Co on February 15, 2024 and sell it today you would earn a total of  2,350  from holding Swancor Holding Co or generate 18.22% return on investment over 90 days.

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

Swancor Holding Co  vs.  Airtac International Group

Swancor Holding

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Swancor Holding Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Swancor Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Airtac International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Airtac International Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Airtac International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Swancor Holding and Airtac International

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

The idea behind Swancor Holding Co and Airtac International Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.