Correlation Between Beijing Enlight and Air China
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By analyzing existing cross correlation between Beijing Enlight Media and Air China Ltd, you can compare the effects of market volatilities on Beijing Enlight 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 Beijing Enlight with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Enlight and Air China.
Diversification Opportunities for Beijing Enlight and Air China
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Air is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Enlight Media and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Beijing Enlight 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 Beijing Enlight Media 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 Beijing Enlight i.e., Beijing Enlight and Air China go up and down completely randomly.
Pair Corralation between Beijing Enlight and Air China
Assuming the 90 days trading horizon Beijing Enlight Media is expected to generate 1.15 times more return on investment than Air China. However, Beijing Enlight is 1.15 times more volatile than Air China Ltd. It trades about -0.33 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.39 per unit of risk. If you would invest 979.00 in Beijing Enlight Media on October 14, 2024 and sell it today you would lose (132.00) from holding Beijing Enlight Media or give up 13.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Enlight Media vs. Air China Ltd
Performance |
| Timeline |
| Beijing Enlight Media |
| Air China |
Beijing Enlight and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Enlight and Air China
The main advantage of trading using opposite Beijing Enlight and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Enlight 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.| Beijing Enlight vs. Shandong Rike Chemical | Beijing Enlight vs. Guangzhou Jointas Chemical | Beijing Enlight vs. Liaoning Dingjide Petrochemical | Beijing Enlight vs. Shanghai Material Trading |
| Air China vs. State Grid InformationCommunication | Air China vs. Strait Innovation Internet | Air China vs. Sichuan Jinshi Technology | Air China vs. Beijing Enlight Media |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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