Correlation Between Shenyang Chemical and Air China
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By analyzing existing cross correlation between Shenyang Chemical Industry and Air China Ltd, you can compare the effects of market volatilities on Shenyang Chemical and Air China 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 Shenyang Chemical with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Chemical and Air China.
Diversification Opportunities for Shenyang Chemical and Air China
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Air is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Chemical Industry and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Shenyang Chemical 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 Shenyang Chemical Industry are associated (or correlated) with Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China has no effect on the direction of Shenyang Chemical i.e., Shenyang Chemical and Air China go up and down completely randomly.
Pair Corralation between Shenyang Chemical and Air China
Assuming the 90 days trading horizon Shenyang Chemical Industry is expected to under-perform the Air China. In addition to that, Shenyang Chemical is 1.49 times more volatile than Air China Ltd. It trades about -0.02 of its total potential returns per unit of risk. Air China Ltd is currently generating about -0.03 per unit of volatility. If you would invest 1,039 in Air China Ltd on October 16, 2024 and sell it today you would lose (311.00) from holding Air China Ltd or give up 29.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenyang Chemical Industry vs. Air China Ltd
Performance |
| Timeline |
| Shenyang Chemical |
| Air China |
Shenyang Chemical and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenyang Chemical and Air China
The main advantage of trading using opposite Shenyang Chemical and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Chemical position performs unexpectedly, Air China 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 China will offset losses from the drop in Air China's long position.| Shenyang Chemical vs. Luyin Investment Group | Shenyang Chemical vs. Chengdu Xingrong Investment | Shenyang Chemical vs. Nuode Investment Co | Shenyang Chemical vs. Western Metal Materials |
| Air China vs. Huasi Agricultural Development | Air China vs. Fiberhome Telecommunication Technologies | Air China vs. Weichai Heavy Machinery | Air China vs. Nanxing Furniture Machinery |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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