Correlation Between Longmaster Information and Air China
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By analyzing existing cross correlation between Longmaster Information Tech and Air China Ltd, you can compare the effects of market volatilities on Longmaster Information 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 Longmaster Information with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longmaster Information and Air China.
Diversification Opportunities for Longmaster Information and Air China
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Longmaster and Air is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Longmaster Information Tech and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Longmaster Information 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 Longmaster Information Tech 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 Longmaster Information i.e., Longmaster Information and Air China go up and down completely randomly.
Pair Corralation between Longmaster Information and Air China
Assuming the 90 days trading horizon Longmaster Information Tech is expected to generate 2.5 times more return on investment than Air China. However, Longmaster Information is 2.5 times more volatile than Air China Ltd. It trades about 0.03 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.03 per unit of risk. If you would invest 1,098 in Longmaster Information Tech on October 11, 2024 and sell it today you would earn a total of 307.00 from holding Longmaster Information Tech or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longmaster Information Tech vs. Air China Ltd
Performance |
| Timeline |
| Longmaster Information |
| Air China |
Longmaster Information and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longmaster Information and Air China
The main advantage of trading using opposite Longmaster Information and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longmaster Information 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.| Longmaster Information vs. Omnijoi Media Corp | Longmaster Information vs. Guilin Seamild Foods | Longmaster Information vs. Shuhua Sports Co | Longmaster Information vs. Great Sun Foods Co |
| Air China vs. CIMC Vehicles Co | Air China vs. Jinxiandai Information Industry | Air China vs. Longmaster Information Tech | Air China vs. Jiangsu Xinri E Vehicle |
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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