Correlation Between Guangdong TianYiMa and Air China
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By analyzing existing cross correlation between Guangdong TianYiMa Information and Air China Ltd, you can compare the effects of market volatilities on Guangdong TianYiMa 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 Guangdong TianYiMa with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong TianYiMa and Air China.
Diversification Opportunities for Guangdong TianYiMa and Air China
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Air is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong TianYiMa Information and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China and Guangdong TianYiMa 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 Guangdong TianYiMa Information 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 Guangdong TianYiMa i.e., Guangdong TianYiMa and Air China go up and down completely randomly.
Pair Corralation between Guangdong TianYiMa and Air China
Assuming the 90 days trading horizon Guangdong TianYiMa Information is expected to generate 2.41 times more return on investment than Air China. However, Guangdong TianYiMa is 2.41 times more volatile than Air China Ltd. It trades about 0.01 of its potential returns per unit of risk. Air China Ltd is currently generating about -0.04 per unit of risk. If you would invest 3,147 in Guangdong TianYiMa Information on November 5, 2024 and sell it today you would lose (412.00) from holding Guangdong TianYiMa Information or give up 13.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong TianYiMa Information vs. Air China Ltd
Performance |
| Timeline |
| Guangdong TianYiMa |
| Air China |
Guangdong TianYiMa and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong TianYiMa and Air China
The main advantage of trading using opposite Guangdong TianYiMa and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong TianYiMa 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.| Guangdong TianYiMa vs. Xiandai Investment Co | Guangdong TianYiMa vs. Zhejiang Construction Investment | Guangdong TianYiMa vs. Qingdao Choho Industrial | Guangdong TianYiMa vs. Hubei Geoway Investment |
| Air China vs. Ligao Foods CoLtd | Air China vs. Shanghai Ziyan Foods | Air China vs. Xiangyang Automobile Bearing | Air China vs. Ningbo Fangzheng Automobile |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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