Correlation Between CSBC Corp and Air Asia
Can any of the company-specific risk be diversified away by investing in both CSBC Corp and Air Asia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CSBC Corp and Air Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSBC Corp Taiwan and Air Asia Co, you can compare the effects of market volatilities on CSBC Corp and Air Asia 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 CSBC Corp with a short position of Air Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSBC Corp and Air Asia.
Diversification Opportunities for CSBC Corp and Air Asia
Pay attention - limited upside
The 3 months correlation between CSBC and Air is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CSBC Corp Taiwan and Air Asia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Asia and CSBC Corp 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 CSBC Corp Taiwan are associated (or correlated) with Air Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Asia has no effect on the direction of CSBC Corp i.e., CSBC Corp and Air Asia go up and down completely randomly.
Pair Corralation between CSBC Corp and Air Asia
Assuming the 90 days trading horizon CSBC Corp Taiwan is expected to generate 0.59 times more return on investment than Air Asia. However, CSBC Corp Taiwan is 1.69 times less risky than Air Asia. It trades about 0.37 of its potential returns per unit of risk. Air Asia Co is currently generating about -0.02 per unit of risk. If you would invest 1,490 in CSBC Corp Taiwan on November 28, 2024 and sell it today you would earn a total of 120.00 from holding CSBC Corp Taiwan or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSBC Corp Taiwan vs. Air Asia Co
Performance |
| Timeline |
| CSBC Corp Taiwan |
| Air Asia |
CSBC Corp and Air Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSBC Corp and Air Asia
The main advantage of trading using opposite CSBC Corp and Air Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSBC Corp position performs unexpectedly, Air Asia 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 Asia will offset losses from the drop in Air Asia's long position.| CSBC Corp vs. Sincere Navigation Corp | CSBC Corp vs. Evergreen International Storage | CSBC Corp vs. First Steamship Co | CSBC Corp vs. Mercuries Life Insurance |
| Air Asia vs. CHC Healthcare Group | Air Asia vs. Phytohealth Corp | Air Asia vs. Simple Mart Retail | Air Asia vs. Mercuries Life Insurance |
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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