Correlation Between Martinrea International and AirBoss Of

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

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

Diversification Opportunities for Martinrea International and AirBoss Of

0.84

Correlation Coefficient

Martinrea International  AirBoss Of

Very poor diversification

The 3 months correlation between Martinrea and AirBoss is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Martinrea International and AirBoss of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirBoss of America and Martinrea 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 Martinrea International are associated (or correlated) with AirBoss Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirBoss of America has no effect on the direction of Martinrea International i.e., Martinrea International and AirBoss Of go up and down completely randomly.

Pair Corralation between Martinrea International and AirBoss Of

Assuming the 90 days trading horizon Martinrea International is expected to generate 1.36 times less return on investment than AirBoss Of. But when comparing it to its historical volatility, Martinrea International is 1.27 times less risky than AirBoss Of. It trades about 0.16 of its potential returns per unit of risk. AirBoss of America is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  369.00  in AirBoss of America on April 24, 2025 and sell it today you would earn a total of  125.00  from holding AirBoss of America or generate 33.88% return on investment over 90 days.

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

Martinrea International  vs.  AirBoss of America

Martinrea International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Martinrea International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Martinrea International displayed solid returns over the last few months and may actually be approaching a breakup point.

AirBoss of America

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AirBoss of America are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, AirBoss Of displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Martinrea International and AirBoss Of

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

The idea behind Martinrea International and AirBoss of America 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 Stocks Directory module to find actively traded stocks across global markets.