Correlation Between Air New and Air New

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

By analyzing existing cross correlation between Air New Zealand and Air New Zealand, you can compare the effects of market volatilities on Air New and Air New 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 New with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Air New.

Diversification Opportunities for Air New and Air New

0.68

Correlation Coefficient

Air New  Air New

Poor diversification

The 3 months correlation between Air and Air is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and Air New 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 New Zealand are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Air New i.e., Air New and Air New go up and down completely randomly.

Pair Corralation between Air New and Air New

Assuming the 90 days horizon Air New Zealand is expected to under-perform the Air New. In addition to that, Air New is 1.01 times more volatile than Air New Zealand. It trades about -0.16 of its total potential returns per unit of risk. Air New Zealand is currently generating about -0.09 per unit of volatility. If you would invest  36.00  in Air New Zealand on February 14, 2024 and sell it today you would lose (3.00) from holding Air New Zealand or give up 8.33% of portfolio value over 90 days.

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

Air New Zealand  vs.  Air New Zealand

Air New Zealand

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air New Zealand has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Air New Zealand

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Air New Zealand has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Air New and Air New

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

The idea behind Air New Zealand and Air New Zealand 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.