Correlation Between Strait Innovation and Air China
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By analyzing existing cross correlation between Strait Innovation Internet and Air China Ltd, you can compare the effects of market volatilities on Strait Innovation 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 Strait Innovation with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strait Innovation and Air China.
Diversification Opportunities for Strait Innovation and Air China
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strait and Air is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Strait Innovation Internet and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Strait Innovation 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 Strait Innovation Internet 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 Strait Innovation i.e., Strait Innovation and Air China go up and down completely randomly.
Pair Corralation between Strait Innovation and Air China
Assuming the 90 days trading horizon Strait Innovation Internet is expected to generate 1.64 times more return on investment than Air China. However, Strait Innovation is 1.64 times more volatile than Air China Ltd. It trades about -0.07 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.15 per unit of risk. If you would invest 293.00 in Strait Innovation Internet on October 28, 2024 and sell it today you would lose (18.00) from holding Strait Innovation Internet or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strait Innovation Internet vs. Air China Ltd
Performance |
| Timeline |
| Strait Innovation |
| Air China |
Strait Innovation and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strait Innovation and Air China
The main advantage of trading using opposite Strait Innovation and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strait Innovation 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.| Strait Innovation vs. Suzhou Weizhixiang Food | Strait Innovation vs. Holitech Technology Co | Strait Innovation vs. Northking Information Technology | Strait Innovation vs. Yankershop Food Co |
| Air China vs. China Petroleum Chemical | Air China vs. PetroChina Co Ltd | Air China vs. China State Construction | Air China vs. China Railway Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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