Correlation Between Kuang Chi and Air China
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By analyzing existing cross correlation between Kuang Chi Technologies and Air China Ltd, you can compare the effects of market volatilities on Kuang Chi 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 Kuang Chi with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuang Chi and Air China.
Diversification Opportunities for Kuang Chi and Air China
Very weak diversification
The 3 months correlation between Kuang and Air is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kuang Chi Technologies and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Kuang Chi 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 Kuang Chi Technologies 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 Kuang Chi i.e., Kuang Chi and Air China go up and down completely randomly.
Pair Corralation between Kuang Chi and Air China
Assuming the 90 days trading horizon Kuang Chi Technologies is expected to generate 1.72 times more return on investment than Air China. However, Kuang Chi is 1.72 times more volatile than Air China Ltd. It trades about 0.07 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 1,811 in Kuang Chi Technologies on October 16, 2024 and sell it today you would earn a total of 2,234 from holding Kuang Chi Technologies or generate 123.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuang Chi Technologies vs. Air China Ltd
Performance |
| Timeline |
| Kuang Chi Technologies |
| Air China |
Kuang Chi and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuang Chi and Air China
The main advantage of trading using opposite Kuang Chi and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuang Chi 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.| Kuang Chi vs. China World Trade | Kuang Chi vs. XiaMen HongXin Electron tech | Kuang Chi vs. Sharetronic Data Technology | Kuang Chi vs. China Eastern Airlines |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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