Correlation Between China Airlines and Antec
Can any of the company-specific risk be diversified away by investing in both China Airlines and Antec 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 Antec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Airlines and Antec Inc, you can compare the effects of market volatilities on China Airlines and Antec 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 Antec. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Airlines and Antec.
Diversification Opportunities for China Airlines and Antec
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Antec is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Airlines and Antec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antec Inc 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 Antec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antec Inc has no effect on the direction of China Airlines i.e., China Airlines and Antec go up and down completely randomly.
Pair Corralation between China Airlines and Antec
Assuming the 90 days trading horizon China Airlines is expected to generate 3.99 times less return on investment than Antec. But when comparing it to its historical volatility, China Airlines is 2.47 times less risky than Antec. It trades about 0.04 of its potential returns per unit of risk. Antec Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,424 in Antec Inc on August 25, 2024 and sell it today you would earn a total of 2,131 from holding Antec Inc or generate 149.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Airlines vs. Antec Inc
Performance |
| Timeline |
| China Airlines |
| Antec Inc |
China Airlines and Antec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Airlines and Antec
The main advantage of trading using opposite China Airlines and Antec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Airlines position performs unexpectedly, Antec 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 Antec will offset losses from the drop in Antec's long position.| China Airlines vs. Sunny Friend Environmental | China Airlines vs. TTET Union Corp | China Airlines vs. ECOVE Environment Corp | China Airlines vs. Yulon Finance Corp |
| Antec vs. Advantech Co | Antec vs. IEI Integration Corp | Antec vs. Flytech Technology Co | Antec vs. ADLINK 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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