Correlation Between China Airlines and Cayenne Entertainment
Can any of the company-specific risk be diversified away by investing in both China Airlines and Cayenne Entertainment 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 China Airlines and Cayenne Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Airlines and Cayenne Entertainment Technology, you can compare the effects of market volatilities on China Airlines and Cayenne Entertainment 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 China Airlines with a short position of Cayenne Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Airlines and Cayenne Entertainment.
Diversification Opportunities for China Airlines and Cayenne Entertainment
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Cayenne is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding China Airlines and Cayenne Entertainment Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayenne Entertainment and China Airlines 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 China Airlines are associated (or correlated) with Cayenne Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayenne Entertainment has no effect on the direction of China Airlines i.e., China Airlines and Cayenne Entertainment go up and down completely randomly.
Pair Corralation between China Airlines and Cayenne Entertainment
Assuming the 90 days trading horizon China Airlines is expected to generate 0.45 times more return on investment than Cayenne Entertainment. However, China Airlines is 2.21 times less risky than Cayenne Entertainment. It trades about 0.07 of its potential returns per unit of risk. Cayenne Entertainment Technology is currently generating about -0.08 per unit of risk. If you would invest 2,255 in China Airlines on October 26, 2024 and sell it today you would earn a total of 345.00 from holding China Airlines or generate 15.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Airlines vs. Cayenne Entertainment Technolo
Performance |
| Timeline |
| China Airlines |
| Cayenne Entertainment |
China Airlines and Cayenne Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Airlines and Cayenne Entertainment
The main advantage of trading using opposite China Airlines and Cayenne Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Airlines position performs unexpectedly, Cayenne Entertainment 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 Cayenne Entertainment will offset losses from the drop in Cayenne Entertainment's long position.| China Airlines vs. Eva Airways Corp | China Airlines vs. Evergreen Marine Corp | China Airlines vs. Yang Ming Marine | China Airlines vs. China Steel Corp |
| Cayenne Entertainment vs. China Airlines | Cayenne Entertainment vs. Simplo Technology Co | Cayenne Entertainment vs. Voltronic Power Technology | Cayenne Entertainment vs. Nova Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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