Correlation Between Hangzhou Gisway and Air China
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By analyzing existing cross correlation between Hangzhou Gisway Information and Air China Ltd, you can compare the effects of market volatilities on Hangzhou Gisway 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 Hangzhou Gisway with a short position of Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Gisway and Air China.
Diversification Opportunities for Hangzhou Gisway and Air China
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hangzhou and Air is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Gisway 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 Hangzhou Gisway 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 Hangzhou Gisway 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 Hangzhou Gisway i.e., Hangzhou Gisway and Air China go up and down completely randomly.
Pair Corralation between Hangzhou Gisway and Air China
Assuming the 90 days trading horizon Hangzhou Gisway Information is not expected to generate positive returns. Moreover, Hangzhou Gisway is 2.06 times more volatile than Air China Ltd. It trades away all of its potential returns to assume current level of volatility. Air China Ltd is currently generating about -0.03 per unit of risk. If you would invest 4,137 in Hangzhou Gisway Information on September 3, 2024 and sell it today you would lose (903.00) from holding Hangzhou Gisway Information or give up 21.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.29% |
| Values | Daily Returns |
Hangzhou Gisway Information vs. Air China Ltd
Performance |
| Timeline |
| Hangzhou Gisway Info |
| Air China |
Hangzhou Gisway and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hangzhou Gisway and Air China
The main advantage of trading using opposite Hangzhou Gisway and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Gisway 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.| Hangzhou Gisway vs. Fujian Longzhou Transportation | Hangzhou Gisway vs. Hainan Haiqi Transportation | Hangzhou Gisway vs. Broadex Technologies Co | Hangzhou Gisway vs. Heilongjiang Transport Development |
| Air China vs. Cultural Investment Holdings | Air China vs. Gome Telecom Equipment | Air China vs. Bus Online Co | Air China vs. Holitech Technology Co |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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