Correlation Between Double Medical and Air China
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By analyzing existing cross correlation between Double Medical Technology and Air China Ltd, you can compare the effects of market volatilities on Double Medical 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 Double Medical with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Double Medical and Air China.
Diversification Opportunities for Double Medical and Air China
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Double and Air is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Double Medical Technology and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Double Medical 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 Double Medical Technology 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 Double Medical i.e., Double Medical and Air China go up and down completely randomly.
Pair Corralation between Double Medical and Air China
Assuming the 90 days trading horizon Double Medical Technology is expected to under-perform the Air China. But the stock apears to be less risky and, when comparing its historical volatility, Double Medical Technology is 1.14 times less risky than Air China. The stock trades about -0.17 of its potential returns per unit of risk. The Air China Ltd is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 750.00 in Air China Ltd on September 13, 2024 and sell it today you would earn a total of 136.00 from holding Air China Ltd or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Double Medical Technology vs. Air China Ltd
Performance |
| Timeline |
| Double Medical Technology |
| Air China |
Double Medical and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Double Medical and Air China
The main advantage of trading using opposite Double Medical and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Double Medical 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.| Double Medical vs. Industrial and Commercial | Double Medical vs. Kweichow Moutai Co | Double Medical vs. Agricultural Bank of | Double Medical vs. China Mobile Limited |
| Air China vs. Shanghai Action Education | Air China vs. Heilongjiang Publishing Media | Air China vs. Qtone Education Group | Air China vs. Southern PublishingMedia 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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