Correlation Between PKU HealthCare and Air China
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By analyzing existing cross correlation between PKU HealthCare Corp and Air China Ltd, you can compare the effects of market volatilities on PKU HealthCare 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 PKU HealthCare with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKU HealthCare and Air China.
Diversification Opportunities for PKU HealthCare and Air China
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKU and Air is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PKU HealthCare Corp and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and PKU HealthCare 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 PKU HealthCare Corp 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 PKU HealthCare i.e., PKU HealthCare and Air China go up and down completely randomly.
Pair Corralation between PKU HealthCare and Air China
Assuming the 90 days trading horizon PKU HealthCare Corp is expected to under-perform the Air China. In addition to that, PKU HealthCare is 2.37 times more volatile than Air China Ltd. It trades about -0.1 of its total potential returns per unit of risk. Air China Ltd is currently generating about -0.12 per unit of volatility. If you would invest 810.00 in Air China Ltd on October 17, 2024 and sell it today you would lose (49.00) from holding Air China Ltd or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKU HealthCare Corp vs. Air China Ltd
Performance |
| Timeline |
| PKU HealthCare Corp |
| Air China |
PKU HealthCare and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKU HealthCare and Air China
The main advantage of trading using opposite PKU HealthCare and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKU HealthCare 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.| PKU HealthCare vs. Dazhong Transportation Group | PKU HealthCare vs. Aba Chemicals Corp | PKU HealthCare vs. Agricultural Bank of | PKU HealthCare vs. Postal Savings Bank |
| Air China vs. PKU HealthCare Corp | Air China vs. Suzhou Xingye Material | Air China vs. Kangxin New Materials | Air China vs. Chahua Modern Housewares |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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