Correlation Between Shandong Polymer and Air China
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By analyzing existing cross correlation between Shandong Polymer Biochemicals and Air China Ltd, you can compare the effects of market volatilities on Shandong Polymer 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 Shandong Polymer with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Polymer and Air China.
Diversification Opportunities for Shandong Polymer and Air China
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and Air is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Polymer Biochemicals and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Shandong Polymer 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 Shandong Polymer Biochemicals 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 Shandong Polymer i.e., Shandong Polymer and Air China go up and down completely randomly.
Pair Corralation between Shandong Polymer and Air China
Assuming the 90 days trading horizon Shandong Polymer Biochemicals is expected to generate 1.57 times more return on investment than Air China. However, Shandong Polymer is 1.57 times more volatile than Air China Ltd. It trades about 0.0 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.03 per unit of risk. If you would invest 553.00 in Shandong Polymer Biochemicals on September 3, 2024 and sell it today you would lose (89.00) from holding Shandong Polymer Biochemicals or give up 16.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Polymer Biochemicals vs. Air China Ltd
Performance |
| Timeline |
| Shandong Polymer Bio |
| Air China |
Shandong Polymer and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Polymer and Air China
The main advantage of trading using opposite Shandong Polymer and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Polymer 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.| Shandong Polymer vs. Zijin Mining Group | Shandong Polymer vs. Baoshan Iron Steel | Shandong Polymer vs. Hoshine Silicon Ind |
| Air China vs. Cultural Investment Holdings | Air China vs. Gome Telecom Equipment | Air China vs. Bus Online Co | Air China vs. Holitech Technology Co |
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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