Correlation Between Ningbo Fangzheng and Air China
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Air China Ltd, you can compare the effects of market volatilities on Ningbo Fangzheng 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 Ningbo Fangzheng with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Air China.
Diversification Opportunities for Ningbo Fangzheng and Air China
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ningbo and Air is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Ningbo Fangzheng 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 Ningbo Fangzheng Automobile 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 Ningbo Fangzheng i.e., Ningbo Fangzheng and Air China go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Air China
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to generate 1.25 times more return on investment than Air China. However, Ningbo Fangzheng is 1.25 times more volatile than Air China Ltd. It trades about -0.06 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.1 per unit of risk. If you would invest 1,623 in Ningbo Fangzheng Automobile on October 30, 2024 and sell it today you would lose (128.00) from holding Ningbo Fangzheng Automobile or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Air China Ltd
Performance |
| Timeline |
| Ningbo Fangzheng Aut |
| Air China |
Ningbo Fangzheng and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ningbo Fangzheng and Air China
The main advantage of trading using opposite Ningbo Fangzheng and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng 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.| Ningbo Fangzheng vs. Kweichow Moutai Co | Ningbo Fangzheng vs. Jiangsu Pacific Quartz | Ningbo Fangzheng vs. Shenzhen Transsion Holdings | Ningbo Fangzheng vs. Beijing Roborock Technology |
| Air China vs. Innovative Medical Management | Air China vs. Sichuan Yahua Industrial | Air China vs. Hainan Airlines Co | Air China vs. CICC Fund Management |
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 Stocks Directory module to find actively traded stocks across global markets.
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