Correlation Between Digital China and AECC Aviation
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By analyzing existing cross correlation between Digital China Information and AECC Aviation Power, you can compare the effects of market volatilities on Digital China and AECC Aviation 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 Digital China with a short position of AECC Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and AECC Aviation.
Diversification Opportunities for Digital China and AECC Aviation
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Digital and AECC is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Information and AECC Aviation Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECC Aviation Power and Digital China 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 Digital China Information are associated (or correlated) with AECC Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECC Aviation Power has no effect on the direction of Digital China i.e., Digital China and AECC Aviation go up and down completely randomly.
Pair Corralation between Digital China and AECC Aviation
Assuming the 90 days trading horizon Digital China Information is expected to generate 1.57 times more return on investment than AECC Aviation. However, Digital China is 1.57 times more volatile than AECC Aviation Power. It trades about 0.02 of its potential returns per unit of risk. AECC Aviation Power is currently generating about 0.01 per unit of risk. If you would invest 1,106 in Digital China Information on September 4, 2024 and sell it today you would earn a total of 119.00 from holding Digital China Information or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Digital China Information vs. AECC Aviation Power
Performance |
| Timeline |
| Digital China Information |
| AECC Aviation Power |
Digital China and AECC Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital China and AECC Aviation
The main advantage of trading using opposite Digital China and AECC Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, AECC Aviation 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 AECC Aviation will offset losses from the drop in AECC Aviation's long position.| Digital China vs. Jilin Chemical Fibre | Digital China vs. CICC Fund Management | Digital China vs. Hubei Dinglong Chemical | Digital China vs. Innovative Medical Management |
| AECC Aviation vs. Sunwave Communications Co | AECC Aviation vs. Emdoor Information Co | AECC Aviation vs. Digital China Information | AECC Aviation vs. Guangxi Wuzhou Communications |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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